Mutual fund assets racing towards Rs 20 lakh cr

Robust inflows from domestic investors through systematic investment plans are a big boon

The domestic mutual fund industry has shown phenomenal growth this financial year. Assets under management (AUM) of the industry have grown 45 per cent since April 2016 to Rs 17.9 lakh crore at the end of February. At the end of 2016-17, AUMs stood at Rs 12.32 lakh crore. The asset management industry is just 12 per cent short of reaching the 

Rs 20 lakh crore. Interestingly, MF industry captains in 2015-16 had forecast the industry would touch Rs 20 lakh crore by 2020. But, if the pace of growth shown in the recent months continues, it would take just five months to achieve that number. Following the rapid strides made in recent months, industry players have already started hinting they may not have to wait till 2020.

Robust inflows from domestic investors through systematic investment plans are proving to be a big boon for the sector. On an average, the industry is getting about Rs 4,000 crore of retail flows per month. This translates into a sum of nearly Rs 50,000 crore per annum — a serious quantum of money. A surge in interest for equity schemes over the past few years are providing an additional push to the industry. Over the past three years, number of equity accounts has risen by over 10 million to over 40 million — for the first time since 2010-11.

Since the start of the century, the asset size of the sector has grown from about Rs 1 lakh crore to nearly Rs 18 lakh crore. This is a massive growth, and, in particular, the past three years have catapulted the sector to another level. Growing equity assets are countering foreign outflows and helping the Indian share market to stabilise. Amid this what is important is the fact that India’s investors are far more mature than what they had been a decade ago. Tighter and stricter regulations have made the industry better and strong. Transparency is the biggest strength of the industry — which can’t be compared with any other financial product available in the country. With technology boom, ease of transactions and better advice from distributors, the sector is all set to reach newer heights in the years to come.

Note: *Till February 2017; AUM data as on end of every month; as on end-March for financial year data (Sources: Sebi, Amfi) 

Note: *Till February 2017; AUM data as on end of every month; as on end-March for financial year data (Sources: Sebi, Amfi)