Modi’s 10 years: Mutual fund industry assets swell over 6 times to over Rs 61 lakh cr | Equity schemes steal the show

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In the last 10 years, the Indian mutual fund industry’s net assets under management (AUM) have risen by 6 folds to over Rs 61 lakh crore. In May 2014, when Narendra Modi-led BJP came to power at the Centre, the mutual fund industry’s AUM stood at Rs 10 lakh crore.

As of June 2024, the AUM of the asset management companies in India stood at Rs 61.3 lakh crore, according to AMFI data. Surprisingly, the last Rs 10 lakh crore has been added to the AUM by the mutual fund industry in just 6 months.

“June was a watershed month for the MF industry, with the AUM number hitting Rs 60 lakh crore for the very first time. Ten years ago, in 2014, the industry was at Rs 10 lakh crore. We have crossed Rs 60 lakh crore for the first time, closing at Rs 61.3 lakh crore. It is also important to note that exactly six months ago, we were at Rs 51 lakh crore, and we have added Rs 10 lakh crore in this period. The addition in six months is equal to what we were as an industry ten years ago!,” says Anand Vardarajan, Chief Business Officer, Tata Asset Management.

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Equity mutual fund inflows

Mutual fund investors poured in Rs 40,608 crore in equity-oriented schemes in June against Rs 34,697 crore in the previous month. This was also the highest inflows in equity schemes in over 50 months. This equity inflows also included Rs 14,000 crore collected from New Fund Offers (NFOs) during the month.

Year-to-date, the inflow into equity schemes stood at Rs 1.65 lakh crore, with multicap, large and midcap, flexicap contributing 10% each. Overall, the AUM of equity-oriented schemes stood at Rs 27 lakh crore in June 2024, according to the AMFI data.

Mutual fund SIP inflows

Mutual fund investors invested Rs 21,262 crore in systematic investment plans (SIPs) in June 2024. In May, investors had put Rs 20,904 crore. The overall AUM from SIPs rose to Rs 12.43 lakh crore.

As many as 55 lakh new SIPs were opened in June, taking the total number of SIPs to 8.98 crore.

“This growth is a huge validation of the retailisation of the investor base and investors choosing mutual funds as a reliable investment vehicle for wealth creation,” Vardarajan said.

“Equity flows continue to be strong, and sectoral themes seem to be seeing strong interest. Most categories in equity have been positive, including Value and Contra, which were tepid until now. The Arbitrage category has softened in terms of flows in the last two months. Multi-asset funds saw strong inflows as investors sought to diversify risk. Given the market stance, investors haven’t shied away from being in risk-on mode, with hybrids taking a breather while pure equity diversified funds, especially flexicap and multi-cap funds, are seeing higher interest,” he added.

Fixed income flows have been negative, except for money market and low-duration funds, which saw positive flows largely driven by higher yields and quarterly crossover investments.

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Top performing equity MF segments:

Small Cap – 20.30% annualised

Mid Cap – 18.90% annualised

Thematic-Energy – 18.69% annualised

Sectoral-Technology – 18.44% annualised

Sectoral-Infrastructure – 17.49% annualised

Value-Oriented – 16.61% annualised

Large & Midcap – 16.38% annualised