Mutual funds’ assets under management hit an all-time high of Rs 66.7 trillion in August: AMFI

The mutual fund industry AUM has hit an all-time high of Rs 66.70 lakh crore, led by net inflows in open categories and market value (MTM) gains in the stock market. The industry’s assets under management rose 2.7% or Rs 1.74 lakh crore in absolute terms from Rs 64.97 lakh crore in July, according to a monthly note by the Association of Mutual Funds in India (AMFI).

Growth/equity-oriented schemes’ AUM closed at an all-time high of Rs 30.09 trillion, driven by strong inflows and MTM gains. This represents around 45% of the industry’s AUM. Read also | This hedge fund has returned 85% since its inception. Is it time to invest in this sector?

The monthly note also stated that “Assets under management increased by Rs 75,055 crore, driven by MTM gains and strong inflows. Strong signals of an imminent rate cut by the government US Federal Reserve In the near future, coupled with continued buying by domestic institutional investors (DIIs) and foreign institutional investors (FIIs), helped domestic stocks hit an all-time high during the month.”

The sector/thematic category recorded the highest inflows in August, led by funds mobilised through new fund offerings (NFOs). As in July, more than 50% of inflows in the sector/thematic category were led by funds mobilised through NFOs launched in August.

Assets of income/debt-oriented schemes hit an all-time high of Rs 16 lakh crore in August. This rise was driven by surplus liquidity in the banking system, resulting from high government spending, which pushed government bond yields to nearly two-year lows. Inflows remained positive for the second consecutive month, at Rs 45,169 crore. Debt funds emerged as the preferred option for global investors, seeking stability amid growth concerns. As US manufacturing data revealed signs of contraction, investors globally, including the US, shifted towards safer investment options such as bonds and money market funds, seeking stability, the note said. Assets in the hybrid category were recorded at a new high of Rs 8.61 lakh crore. Inflows totalled Rs 10,005 crore in August. Among all hybrid mutual fund categories, dynamic asset allocation and multi-asset allocation funds accounted for nearly 60% of the inflows in the category. The category had an NFO that mobilised Rs 1,297 crore in the month.

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Among passive funds, AUM hit an all-time high of Rs 11.21 lakh crore, which accounted for about 17% of the industry’s AUM. Other ETFs received the highest inflows of Rs 10,094 crore. Gold ETFs recorded the highest-ever inflows of Rs 1,611 crore in August, following the reduction in customs duties. Assets grew 8.5%, the highest within the sector. passive funds Category. As gold prices rise and the yellow metal’s safe-haven appeal strengthens, investors are increasingly favouring a more diversified investment strategy to allocate their funds.

The monthly SIP Contribution hit a new high of Rs 23,547 crore in August. This, along with MTM gains, helped SIP assets grow 2.3% to Rs 13.39 lakh crore. SIP accounts stood at over 9.61 lakh crore, with a monthly net addition of accounts of 27.40 lakh.

In August 2024, the mutual fund industry achieved a new milestone, with the total portfolio count increasing by 3.1% to 20.45 crore from 19.84 crore in July, adding over 61 lakh new portfolios. Over 46 lakh new accounts were opened in retail-focused schemes such as equity, hybrid and solution-oriented, with the remaining categories adding 15 lakh new accounts.

“Industry assets have touched a new high, with an asset base of Rs 66.70 crore at the end of August 2024. The positive inflow, coupled with a portfolio count exceeding Rs 20 crore, reflects investor confidence and a growing appreciation of mutual funds as a preferred investment avenue. The steadily increasing SIP contribution of Rs 23,547 crore in August 2024 highlights the shift in investor sentiment towards disciplined and long-term wealth accumulation,” said Venkat N Chalasani, CEO, AMFI.

“As mutual funds remain a key stabilising factor for the equity markets in India, our commitment to transparency and excellence remains steadfast as we strive to deliver an exceptional investment experience and adapt to the evolving needs of our investors,” he added.