Mutual fund industry AUM rises 5.7% to Rs 2.2 trillion in 2022: Amfi

The mutual fund industry added Rs 2.2 lakh crore to its asset base in 2022, driven by consistent monthly increase in SIP (Systematic Investment Plan) flows.

The Assets Under Management (AUM) of the mutual fund industry rose by 5.7 per cent or Rs 2.2 lakh crore to a total Rs 39.88 lakh crore in 2022, data from the Association of Mutual Fund Industry (Amfi) showed on Tuesday.

This was way lower than a surge of nearly 22 per cent or an increase of close to Rs 7 lakh crore in the asset base to Rs 37.72 lakh crore in 2021.

"The industry grew at a slower pace in 2022 due to uncertainty in stock markets, and changing interest rate scenarios affecting the business environment at large. Understandably, investors have been in step with these changes by reallocating their investments between equity, debt and hybrid schemes," Gopal Kavalireddi, Head of Research at FYERS, said.

While, the growth of 42-player mutual fund space in 2021 was mainly braced by a rally in the stock markets.

The increase in asset base in 2022 is mostly the result of advanced SIP flows, which touched Rs 13,000-crore for the second time in a row in November. Besides, industry body Amfi has played an important role in driving awareness towards mutual funds among retail investors, Akhil Chaturvedi, Chief Business Officer of Motilal Ostwal AMC, said.

During the calendar year, SIP inflows averaged more than Rs 12,500 crore per month, helping investors to stay in the stock market and benefit from Rupee cost averaging. The steady inflow suggests resilience in domestic inflows, which have been strong counterbalance to FPIs (Foreign Portfolio Investors) selling.

Further, the current run rate of inflows is expected to continue in 2023 with monthly SIPs touching around Rs 14,000 crore on an average, Chaturvedi said.

In 2022, the total net flows into all mutual funds stood at Rs 71,443 crore, with positive inflows into equity schemes (Rs 1.61 lakh crore), index funds and ETFs (Rs 1.65 lakh crore) and negative inflows into debt schemes (Rs 2.5 lakh crore).

The investor count is estimated to have expanded by 2 crore during the year to 14.11 crore. In 2021, a total of 2.6 crore folios were added.

Equity schemes have got inflow to the tune of Rs 1.61 lakh crore last year as against Rs 96,700 crore in 2021. In December, equity schemes saw a net inflow of Rs 7,303 crore, much higher than Rs 2,258 crore in the preceding month.

The schemes have been witnessing incessant net inflow since March 2021 and before this, the equity schemes had witnessed outflows for eight straight months on account of the Covid pandemic.

Higher awareness about equities and their ability to create wealth over a longer term is what has led to this increase in flows in equity-oriented schemes in 2022.

"Maturing of the retail investor is the reason for the consistent inflow in equities. 2022 has been a volatile year. People have used opportunities of corrections to average down and continue to add money," Radhika Gupta, MD and EO of Edelweiss AMC, said.

Going ahead, experts believe that growth in the asset base in 2023 would be driven by economic growth and retail participation from young investors.