Mutual Funds Experience Significant Growth in Assets Under Management
Mutual funds (MFs) have witnessed a remarkable surge, managing assets worth Rs 66.2 trillion during the July to September quarter, marking a substantial increase of 12.3% compared to the previous three-month period. This growth represents the most significant quarterly rise in MF assets observed in over five years.
In contrast, the average assets under management (AUM) for the April to June quarter were recorded at Rs 59 trillion.
The Surge Driven by Market Performance
Experts attribute this impressive AUM growth primarily to a robust rally in equity markets and unprecedented inflows into equity schemes. The key stock indices, Nifty 50 and Sensex, experienced approximately 7% gains during Q2 ending September 2024. During this bullish phase, investors injected over Rs 75,000 crore into active equity schemes throughout July and August, bolstered by new fund launches.
DP Singh, Deputy Managing Director & Joint CEO of SBI Mutual Fund stated that “the mark-to-market gains from MFs’ equity holdings have played a crucial role in this growth.” He also noted that systematic investment plans (SIPs) contributed significantly to AUM expansion. Interestingly, debt funds also saw improved inflows last quarter due to rising investor interest amid expectations of rate cuts.
Anand Varadarajan from Tata Asset Management Company emphasized that “AUM growth is largely influenced by equity market performance.” He highlighted that all three months of the last quarter ended positively for key indices which resulted in strong mark-to-market gains across both equity and hybrid schemes alongside robust inflows into these categories.
Record SIP Inflows Continue
SIP contributions reached new heights as well; August saw inflows amounting to Rs 23,547 crore compared to Rs 23,332 crore in July. These SIP investments predominantly target equity schemes.
Debt Funds Also Show Positive Trends
According to data from the Association of Mutual Funds in India (Amfi), debt funds recorded net inflows totaling Rs 1.6 trillion during July and August alone.
Major Players Drive AUM Growth
Larger mutual fund houses significantly contributed to overall AUM increases due mainly to their established bases. SBI Mutual Fund emerged as the largest player with managed assets reaching Rs 11 trillion during Q2—an increase of Rs 1.1 trillion from Q1 averages. ICICI Prudential Mutual Fund’s average AUM rose by Rs 90 billion reaching approximately Rs 8.4 trillion while HDFC Mutual Fund similarly grew its assets by around this amount up to about Rs 5.5 trillion. Notably, Nippon India MF exhibited rapid growth among top firms with an impressive average AUM increase of about 13.5%.
Supportive Role for Market Stability
The consistent influxes have positioned mutual funds as vital players supporting market stability over recent years; their investments within equities have surged dramatically lately—totaling around ₹2 trillion already within just six months of FY25 which matches total deployments seen throughout FY24’s entirety so far this calendar year (CY) has seen net buying reach an unprecedented ₹2 .8 Trillion .
For an extended period now—17 consecutive months—mutual funds have remained net buyers with monthly deployments exceeding ₹10 billion consistently across these past fourteen months indicating sustained confidence amongst investors moving forward .
