India’s mutual fund industry achieved a milestone as the total assets under management (AUM) crossed Rs 50 trillion (Rs 50 lakh crore) for the first time in December. This significant growth is largely attributed to steady inflows and a robust rally in the Indian equity markets, as reported by the Association of Mutual Funds in India (AMFI).
What contributed to this growth?
- A substantial rise in AUM from Rs 48.78 trillion in November 2023 to Rs 50.80 trillion in December 2023.
- A strong performance in the equity markets, with the BSE Sensex rising by 7.53% and NSE Nifty gaining 7.93% in December.
- Increased inflows through systematic investment plans (SIPs), which rose to Rs 17,610 crore in December from Rs 17,073 crore the previous month.
- Investor confidence, especially from retail investors, remained high in December.
Details on Equity Mutual Fund Inflows:
- Open-ended equity mutual funds saw a 9% increase in net inflows, reaching Rs 16,997 crore in December.
- Smallcap funds attracted significant interest with net investments of Rs 3,858 crore.
- Midcap fund inflows decreased by 48% in December, while largecap funds experienced net outflows of Rs 281 crore.
- Throughout the year, smallcap funds received a total of Rs 41,035 crore in net inflows, midcap funds attracted Rs 22,913 crore, and largecap funds saw net outflows of Rs 2,968 crore.
- Total net flows for equity funds in the calendar year amounted to Rs 1.61 trillion, with a considerable portion (39% or Rs 63,949 crore) going into mid and small-cap mutual funds.
- Sectoral or thematic funds followed as the next favored category, amassing Rs 30,841 crore over the year.
- Largecap and focused funds were the only categories to record negative inflows, each around 1.7%.
The surge in mutual fund AUM highlights the growing trust and participation of investors in India’s financial markets. With a variety of options available, from smallcap to largecap funds, investors are increasingly diversifying their portfolios and contributing to the overall growth of the mutual fund industry.
