Mutual fund industry's asset base surged 7.6 per cent to a record high of Rs 21 lakh crore at the end of September quarter, driven by strong participation from retail investors.
Mutual fund industry’s asset base surged 7.6 per cent to a record high of Rs 21 lakh crore at the end of September quarter, driven by strong participation from retail investors. In comparison, assets under management (AUM) of the MF industry, comprising 42 players, were at Rs 19.52 lakh crore during the April-June quarter, as per latest data with Association of Mutual Funds in India (Amfi). The industry’s AUM had crossed the milestone of Rs 10 lakh crore for the first time in May 2014 and in a short span of three years, the asset base has more than doubled to Rs 21 lakh crore at the end of September 2017, it added. Prior to this, it had touched a record high of Rs 20.6 lakh crore in August-end.
Industry insiders attributed rise in assets base to increased participation from retail investors and high net worth individuals that attracted investments in both debt and equity segments. Besides, awareness campaigns by asset management companies and industry body Amfi has helped in increasing penetration of mutual funds. “Low interest on deposits appear to be luring more investors into mutual funds. Further, systematic investment plans (SIP) have also given investors a choice as well as flexibility of investing periodically or in lump sum as per their preference,” Vidya Bala, head of mutual fund research at FundsIndia.com said.
SIP is an investment vehicle offered by MFs allowing people to invest in small amounts periodically instead of in lump sum amount. The investment frequency is either weekly, monthly or quarterly. Of the 42 fund houses, as many as 37 MFs witnessed growth in their asset base, while two saw decline in their AUMs. The Amfi data did not include assets base of Sahara MF, Escorts MF and SREI MF.
ICICI Prudential MF continued to be the largest with an AUM of Rs 2,79,066 crore (excluding fund of funds) followed by HDFC MF (Rs 2,69,781 crore), Reliance MF (Rs 2,31,425 crore), Aditya Birla Sun Life MF (Rs 2,24,650 crore) and SBI MF (Rs 1,88,030 crore). A mutual fund pools in assets of its investors and invests the money on their behalf. It provides diverse investment instruments like stocks and bonds without requiring investors to make separate purchases and trades.