The share of mutual funds in household savings is trending upward, indicating a growing preference for mutual funds as a preferred investment avenue. This trend underlines the belief in the mutual fund industry’s ability to deliver stable returns over the long term, despite short-term market fluctuations, as highlighted in the monthly note.
The monthly note also stated that “The US has witnessed high inflows into its debt mutual funds (bonds and money market funds) so far in June 2024. This is primarily on account of bond yields trending at elevated levels amid expectations of an interest rate cut by the US Federal Reserve in the second half of the year on recession concerns. Over the same period, the Indian market has seen higher inflows into equity-oriented funds backed by strong retail participation through the SIP route.”
SIP assets of industry assets stood at 20.2% as against 20.3% in June. SIP accounts totalled Rs 9.34 crore, with the highest monthly net addition in accounts at Rs 35.29 crore.
The total portfolio count hit an all-time high and rose 3.9% to 19.84 crore in July from 19.10 crore in June. In July, the industry added 73 lakh portfolios, of which over 97% were from equity-oriented schemes and other categories including passive funds. Equity-oriented schemes alone accounted for nearly 54 lakh new accounts, while the others category contributed about 16 lakh accounts.
Mutual fund industry assets hit an all-time high of Rs 64.97 trillion, driven by net inflows into debt-oriented mutual funds, equity-oriented mutual funds and mark-to-market (MTM) gains from equity markets. The folio count crossed a new threshold of Rs 19.84 trillion in July.
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In the equity mutual fund segment, assets under management (AUM) hit an all-time high of Rs 29.34 lakh crore (45% of industry AUM), primarily on the back of continued strong inflows and MTM gains. The sector/thematic category becomes the largest in the segment with assets of Rs 4.21 lakh crore. Debt mutual fund assets hit an all-time high of Rs 15.44 lakh crore in July. Liquid funds exhibited the highest MoM increase, up 17.4% to close at Rs 4.93 lakh crore. This trend aligns with the pattern of net asset increases typically seen in the month following an early tax due date, when investors look to temporarily park excess funds.
Assets under management of hybrid funds closed at a new high of Rs 8.45 lakh crore. Inflows into the category stood at Rs 17,436 crore. Multi-asset allocation and arbitrage funds accounted for 82% of the inflows into the category.
For passive funds, AUM hit an all-time high of Rs 10.95 trillion (17% of the sector’s AUM). Index funds led the inflows, led by investor interest in NFOs. Gold ETFs recorded the highest-ever inflows of Rs 1,337 trillion in July.
“The mutual fund industry has demonstrated growth and retail investors have consistently adopted them as a reliable investment avenue. It is evident that mutual funds have become an integral part of retail investors’ financial strategies. Contributions to SIPs, which reached an all-time high of Rs 23,331.75 crore in July 2024, reflect the growing financial discipline among retail investors, helping them build wealth consistently over time. As we continue to navigate an ever-evolving market landscape, the industry’s focus remains on empowering investors and fostering long-term financial well-being,” said Venkat N Chalasani, CEO, AMFI.
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