 "Spike in new MF investors as bull run continues, scheme launches pick up")
The mutual fund (MF) industry saw a sharp jump in new investor additions in January as the bull run extended and fund houses put extra efforts into attracting investors amid a slew of launches.
MFs added nearly 1 million unique investors in January 2024, 50 per cent higher than in December 2023.
The last time MFs added one million investors was in February 2022.
“Systematic investment plans (SIPs) have become the go-to investment avenue for Indians in the capital markets. This consistent monthly growth serves as a compelling narrative. Second, while SIPs continue to gain momentum, unfortunately, new fund offerings (NFOs) remain as a primary avenue for attracting new investors. January saw a plethora of NFOs,” said Swarup Mohanty, vice-chairman and chief executive officer of Mirae Asset Investment Managers (India).
MFs launched 17 schemes in January. Together, they collected Rs 6,430 crore.
In December last year, the launches stood at 14. There is a spike in investor additions during periods of higher launches, especially by larger fund houses in the equity category, as the promotion and marketing activities go up.
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At the end of January, the total investor count stood at 43 million, according to data from the Association of Mutual Funds in India (Amfi).
The total number of unique investors is mapped by the total Permanent Account Number (PAN) registrations.
The industry has set a target of 10 million investors by 2030 as it looks to take the total assets under management (AUM) past the Rs 100 trillion mark.
According to MF executives, the investor addition is gaining pace primarily due to the growing reach of online investment platforms and the growing awareness among investors.
"A lot of new investors are coming through fintechs. Data shows that 40 per cent of the SIPs are being registered in direct plans. Many of them are first-time investors. This trend is also being aided by the changing preferences with investors now looking to invest rather than save," said B Gop Kumar, managing director and chief executive officer of Axis Mutual Fund.
Even as the investor addition has picked up, the tally is still far off from the potential customer base. At 43 million, the MF customer base is only around half of the total income tax return (ITR) filings at 82 million.
The jump in investor addition was also visible in SIP registrations. In January, investors started over 5 million new SIP accounts compared to 4 million in December 2023. The SIP inflows had also surged by more than Rs 1,000 crore month-on-month to Rs 18,800 crore.
According to industry officials, the higher investor interest in MFs in January was also boosted by the market volatility.
The BSE Sensex and the Nifty ended flat in January after hitting fresh record highs during the first half of the previous month.
The Nifty posted gains of over 0.75 per cent during nine of the 21 sessions last month.
Equity MF schemes had garnered the highest-ever gross inflows at Rs 50,800 crore in January.
The record high gross inflows and moderation in outflows led to a 28 per cent month-on-month rise in the net inflows at Rs 21,780 crore — the highest since March 2022.