Investors have pumped in over Rs 2 lakh crore into various mutual fund schemes in the first six months of the current fiscal, with equity and balanced funds accounting for most of the inflows. According to data from Association of Mutual Funds in India (Amfi), equity and equity linked schemes attracted over Rs 80,000 crore, and balanced funds received more than Rs 47,000 crore. Besides, Rs 28,600 crore was invested in liquid or money market fund category. In contrast, gold ETFs continued to see net outflow of Rs 388 crore. “The huge inflow could be attributed into equity, balanced and money market funds with robust participation from retail and HNI investors,” said Anshul Saigal, portfolio manager at Kotak Mutual Fund. Bajaj Capital CEO Rahul Parikh said Indian investors have now assimilated mutual funds and the credit goes to awareness programmes and endeavours by regulators and asset management companies. In all, investors poured in a net of Rs 2,02,001 crore in MF schemes in the first six months of the ongoing fiscal, as compared to Rs 2,34,564 crore in April-September 2016-17.
Liquid and money market funds invest mainly in money market instruments like commercial papers, treasury bills, term deposits and certificate of deposits. These funds have a lower maturity period and do not have any lock—in period. Saigal said that investors are taking the Systematic Investment Plan (SIP) route to invest in mutual funds.
At present, the industry receives about Rs 5,000 crore every month through SIPs — an investment vehicle that allows investors to invest in small amounts periodically, instead of lumpsum. The frequency of investment is usually weekly, monthly or quarterly.
Over the last few years, markets regulator Sebi has been taking measures to increase mutual fund penetration in smaller cities and getting newer investors into the fold by allowing for an additional 30 basis points expense and two basis points towards investor education.
The move seems to be paying off as there has been a rapid rise in the number of new folios as well as increasing share of assets from smaller cities (termed at B—15 cities), which now account for 18 per cent of the overall assets base.
Overall, the assets under management (AUM) of the MF industry, comprising 42 players, reached a staggering Rs 20.4 lakh crore in September—end from Rs 17.54 lakh crore at the end of March.