Backed by a booming stock market and increasing interest from retail investors, the assets under management (AUMs) of the mutual fund industry is likely to touch the magical mark of Rs 20 trillion next month. Moreover, investment by the MF players in the equity market has surpassed that of foreign institutional investors, figures from industry body AMFI have revealed.
The AUM of the country’s MF industry grew 9.8 per cent to Rs 19.26 trillion in April, from Rs 17.54 trillion in March, and it was likely to cross the Rs 20 trillion milestone in the next month itself if the assets grow by another 4 per cent, according to AMFI data collated by rating agency Icra. AMFI, or the Association of Mutual Funds in India, is a nodal association of MFs across the country.
Of the Rs 1.5 trillion that investors pumped in different categories in April, liquid, income, and equity funds (including equity-linked savings schemes or ELSS) saw the highest inflows, it said. The three categories saw net inflows of Rs 0.99 trillion, Rs 0.35 trillion and Rs 0.09 trillion, respectively. Equity funds also got support from the broader market rally as the BSE Sensex hit an all-time high of 30,000 in April.
Equity funds (including ELSS) witnessed net inflows of Rs 9,429 crore in April, an increase of 14.8 per cent MoM and 112.5 per cent YoY. This comes on top of over Rs 70,000 crore investments in equities in the fiscal 2017. In April, net inflows via the SIP route hit an all- time high of Rs 4,200 crore, the data showed.
According to the AMFI, the industry added around 6.26 lakh SIP accounts every month on an average during the last fiscal with an average ticket size of Rs 3,660 per account. MFs pumped in Rs 54,912 crore into the country’s equity market as against Rs 52,977 crore by FIIs/FPIs during the year gone by. The trend continued in April where MFs’ quantum of net investment in equities stood at Rs 9,918 crore compared with Rs 2,417 crore by FIIs/ FPIs, the report said. Total folio count at the April-end grew 1.3 per cent at 5.61 crore from March, a SEBI data said.
Folios are numbers designated for individual investor accounts, though one investor can have multiple accounts. The growth was primarily on the back of 5.85 lakh new folios added to the equity category (including ELSS) and 1.5 lakh new folios to the balanced category. Exchange-traded funds were the only category to witness a decline of 20,000 folios, which could be due to the category’s underperformance compared with the actively-managed funds, it added.
In the last 12 months, assets from beyond 15 cities, or B15 towns, have grown 43.9 per cent due to investor- friendly initiatives by the regulator and awareness campaigns by asset management companies (AMCs). The B15 assets grew Rs 98,525 crore to Rs 3.23 trillion in April from Rs 2.24 trillion a year ago. Currently, B15 towns account for 16.9 per cent of the total assets of the MF industry. However, the share of direct plans in B15 towns is only 22.3 per cent as against 45.6 per cent in top 15 cities.