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The asset base of domestic mutual fund industry witnessed an annual growth of 14 per cent to reach Rs 37.75 lakh crore in the three months ended June on sustained inflows in equity schemes by way of SIPs (Systematic Investment Plans) and lumpsum investments.
Going ahead, the long term trend and acceptability of mutual funds across different investor segments will continue to strengthen taking the Assets Under Management (AUM) to new highs, Abhishek Dev, Co-Founder and CEO of Epsilon Money, said.
According to Association of Mutual Funds in India (Amfi) data, the industry's average AUM rose to Rs 37.75 lakh crore in the quarter ended June 2022 from Rs 33.2 lakh crore at the end of June 2021.
During the March 2022 quarter, the asset base of the industry, comprising 43 players, was at Rs 38.38 lakh crore.
Industry experts attributed increase in the AUM to inflows in the equity schemes, which reflects the growing confidence of investors.
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"There has been sustained inflows in equity schemes in this quarter both by way of SIPs and lumpsum. This could have been much better if new fund offers (NFOs) were permitted," Omkeshwar Singh, Group Head-Mutual Funds at Samco Securities, said.
The Securities and Exchange Board of India (Sebi) had discontinued the launch of NFOs until the new systems concerning pool accounts were determined and the regulator had set July 1 as the deadline for the implementation of the new system.
Rajiv Shastri, Director and CEO of NJ AMC, believes that the AUM of the industry reflects the growing confidence of investors as well as the essential financial inclusion service that the industry offers.
"It is also in line with our long term industry growth expectations which includes the impact of accumulated SIPs, market appreciation and sales growth as more investors discover the wealth creation opportunity presented by equity investments. While a single quarter may not necessarily contain all three elements, they all contribute meaningfully over time," he added.
Vidya Bala, co-founder of PrimeInvestor.in, said that asset base can rise both due to inflows and market movement. Since the market has been flat for the last one year so the increase is mainly due to inflows from the schemes.
According to Epsilon Money's Dev, mutual funds are now well recognised by both retail and corporate investors as a core investment product whether for short term parking needs or for long term asset allocation vehicles.
"The retail SIP investments into equity mutual funds have particularly been robust through this period despite turbulence in equity markets. Another contributing factor is fixed income institutional flows into the short end of the curve," he added.
During April-May, equity mutual fund schemes attracted Rs 28,980 crore, which was way higher than Rs 19,508 crore received in such schemes in the entire June 2021 quarter.
The data for June is not available.
In terms of asset size, SBI Mutual Fund (MF) continued to lead the pack with an average AUM of Rs 6.47 lakh crore (excluding fund of funds) during the quarter under review followed by ICICI Prudential MF (Rs 4.65 lakh crore) and HDFC MF (Rs 4.15 lakh crore).
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