Investors put in more than Rs 70,000 crore in equity-oriented mutual fund schemes in 2016- 17, making it the third successive year of net inflows. The strong inflows have pushed the asset base of equity MFs by an impressive 41 per cent during the period under review.
Market players attributed the phenomenon to continuous participation from retail investors through systematic investment plans (SIPs), along with positive returns from equity funds and steps taken by asset management companies to create awareness among investors. “2016-17 has been a golden year for the mutual fund industry as net inflows into equity MFs have been positive in each month without exception,” Bajaj Capital Group Director Anil Chopra said. “Much of the credit can be given to maturity of retail investors who have come up in the ‘learning curve’ by contributing 1.3 crore monthly SIPs adding more than Rs 4,000 crore per month in various top-performing equity mutual fund schemes.”
According to data from the Association of Mutual Funds in India (Amfi), equity funds, which also include equity-linked saving schemes (ELSS), saw net inflows of Rs 70,367 crore in 2016-17, a slight drop from Rs 74,024 crore infusion in 2015- 16.
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These funds had seen net inflows of Rs 71,029 crore in 2014-15 and withdrawal of Rs 9,269 crore in 2013-14. The gone-by fiscal saw a surge in the number of retail investor accounts, or folios, in equity, equity-linked saving schemes and balanced categories, which grew by more than 58 lakh to 4.4 crore. “The mutual fund industry is at a take-off stage in terms of growth and Indian investors are focussing on investments in equity as an asset class,” said Srikanth Meenakshi, COO, FundsIndia.com, an investment portal for MFs.
The assets under management (AUM) of equity MFs scaled a record high of Rs 5.43 lakh crore at the end of March 2017 from Rs 3.86 lakh crore at March 2016-end. MFs are investment vehicles made up of a pool of funds collected from a number of investors. The funds are invested in stocks, bonds and money market instruments, among others.