The fiscal year 2023-24 turned out to be one of the best years for the domestic mutual funds industry as assets under
management (AUM) spurted by nearly Rs 14 lakh crore to a record Rs 53.40 lakh crore as of March 2024 compared with Rs 39.42 lakh crore as of March 2023, according to AMFI data.
This growth has been mainly driven by growing participation of individual investors, buoyant equity markets and evolving investment strategies.
At over 35%, the percentage gain was the highest since fiscal 2021 when the industry had grown 41%, the Association of Mutual Funds in India (AMFI) said.
The strong gain in industry assets was also replicated in the growth of investors in mutual funds, with the number of
folios closing at record high of 17.78 crore, converting into an investor base of around 4.46 crore.
Women comprised 23% of the investors based on their share of the AUM and men 77%, while individual investors comprised 60% as against institutional investors at40%, the AMFI data showed.
Individual investor-oriented schemes lead the growth chart
Individual investors dominated mutual fund categories such as equity, hybrid and solution-oriented schemes, and led the growth chart as households in the country increased their capital market participation through the mutual fund route. The three categories together accounted for nearly 58% of the industry assets and 80% of the folio count as of March 2024; share of assets of these categories has increased from 45% in March 2019, showcasing their dominance in the growth of industry assets.
Equity-oriented fund categories gain on inflows and mark-to-market (MTM) gains
Equity-oriented mutual fund categories grew 55% in fiscal 2024 to Rs 23.50 lakh crore, led by strong inflows and
MTM gains. The category saw net inflows of Rs 1.84 lakh crore in the fiscal, up from Rs 1.47 lakh crore in the
previous fiscal.
The broad category also benefitted from sharp growth in the underlying equity markets, leading to MTM gains in industry assets. Equity markets represented by Nifty 50 total return index (TRI) and Nifty 500 TRI gained 33% and 44%, respectively, during the fiscal.
Flexi cap category was the largest fund category with assets of over Rs 3.50 lakh crore as of March 2024, followed
by large cap funds with Rs 3.14 lakh crore assets. In terms of percentage growth, multi cap fund category saw the
highest growth of 85% in fiscal 2024, followed by small cap funds at 82%.
In terms of asset flows, sectoral/thematic category saw the highest inflows during fiscal 2024 at over Rs 46,000
crore, followed by small cap fund category with net inflows of over Rs 40,000 crore even though the category saw
marginal outflows in the last month of the fiscal amidst profit booking and regulator’s requirement to conduct stress
test for the category.
Hybrid funds cross Rs 7 lakh crore as investors adopt asset allocation approach
Hybrid funds crossed the Rs 7 lakh crore mark in fiscal 2024 with asset gains of over 50% and closed at Rs 7.22
lakh crore as of March 2024, compared with flat growth seen in the previous fiscal. Growth was led by the investors
adopting the asset allocation approach and investing in arbitrage opportunities in the market. Strong gains in the
underlying equity market also benefitted the segment.
Arbitrage funds saw the highest inflow in the category at over Rs 90,000 crore during the fiscal with assets up
127% (second-highest category growth within hybrid funds) and closed at Rs 1.53 lakh crore. Meanwhile, investors
also actively adopted other hybrid categories with multi-asset allocation, equity savings fund and dynamic asset
allocation / balanced advantage fund categories seeing growth of 153% (highest category growth within the hybrid
category), 85% and 30% respectively.
Within the hybrid funds category, dynamic asset allocation / balanced advantage funds emerged as the largest
category with assets of nearly Rs 2.50 lakh crore as of March 2024, followed by balanced hybrid / aggressive funds
with assets of Rs 1.97 lakh crore.