2017 a blockbuster year for mutual funds, will continue to see strong inflows: Leo Puri of UTI AMC

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Published: December 13, 2017 11:23:17 AM

After mutual fund inflows surged to Rs 1.26 trillion in November, top fund manager Leo Puri said that the industry will continue to see strong inflows.

mutual fund investments, top mutual funds, Top 10 equity mutual funds to invest in 2018, become rich, SBI Bluechip Fund, Franklin India Prima Fund, ICICI Pru Focused Bluechip Fund, HDFC Balanced FundIn November, the industry AUM hit a new life high of Rs 22.79 lakh crore. (Image: Reuters)

After mutual fund inflows surged to Rs 1.26 trillion in November, top fund manager Leo Puri said that the industry will continue to see strong inflows. In November, the industry AUM hit a new life high of Rs 22.79 lakh crore. The equity AUM has nearly quadrupled from Rs 1.66 lakh crore in April 2014 to Rs 6.56 lakh crore as of November 2017 even though in the same period overall industry AUM rose from Rs 9.45 lakh crore to Rs 22.79 lakh crore. “2017 has been a blockbuster year for mutual funds. We have seen a lot of inflows and liquidity,” Leo Puri of UTI AMC told CNBC TV18.

In the same interview, Leo Puri observed that SIPs have a significant contribution in the overall inflows. AMFI data shows that the MF industry had added about 9.05 lakh SIP accounts each month on an average during the FY 2017-18, with an average SIP size of about ₹3,250 per SIP account. In November alone, SIPs contributed to Rs 5,893 crore of the total inflows.

A recent report by Deutsche Bank underscored how the rising component of Systematic Investment Plans (SIPs) is changing the profile of Indian savings towards equity investments.  “The accelerating momentum of inflows into the equity schemes of mutual funds indicates that the financialisation of the domestic savings cycle in India — which began in earnest in 2014 — is becoming deeply entrenched,” Deutsche Bank said in a research note.

“The mutual fund industry has been among the biggest beneficiaries of demonetisation, which resulted in low interest rates on bank deposits. The move also helped investors shift from physical assets to financial savings. Years of perseverance by industry players and the regulator seems to have paid off, finally,” Bajaj Capital CEO Rahul Parikh told PTI earlier this week.

While these inflows may look eye-popping, ace investor Rakesh Jhunjhunwala says that this is just the beginning. “Indian money into the market is going be a tsunami! I think it’s not even reached a flood,” Rakesh Jhunjhunwala told CNBC TV18 in October this year. India’s Warren Buffett is bullish in the whole “financialisation of savings” theme. “Indian money into the market is going be a tsunami! I think it’s not even reached a flood,” Rakesh Jhunjhunwala told CNBC TV18 in a recent interview.

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