 "MFs' assets top Rs 15 lakh cr in July")
India’s mutual fund (MF) sector hit a new milestone in July by topping Rs 15 lakh crore in assets under management (AUM), amid a sharp increase in the stock markets and encouraging flows from investors.
The sector’s assets stood at Rs 13.8 lakh crore at the end of June, after breaching Rs 14 lakh crore in April. Helped by a 10 per cent increase in the benchmark Sensex, the latest addition of Rs 1 lakh crore in assets took only three months.
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The high growth was largely due to mark-to-market appreciation (revaluation at current prices). Most equity schemes have gained by 13-21 per cent; the performance of debt assets, too, have been commendable, as high as 5.5 per cent during the three months ended July.
Income funds have contributed the largest inflow in the current financial year so far (April-July) at Rs 82,746 crore, against Rs 29,269 crore in the same period a year before. On the other hand, the equity segment took a big hit in this period, as inflow dropped to nearly a fourth, to Rs 10,478 crore from Rs 38,095 crore the previous year.
There has been a notable growth in AUM since the Narendra Modi government took charge in May 2014. During these 26 months, the sector’s asset size grew a little over 50 per cent, from less than Rs 10 lakh crore to the current Rs 15.2 lakh crore.
Sundeep Sikka, chief executive officer (CEO) of Reliance MF, says: “The sector is in a structural growth trajectory. The situation is fast changing, as acceptance of MFs as an investment venue is gaining traction. The rising assets are also a function of market appreciation and continuous growth in investments through the SIP (Systematic Investment Plan) route.”
The MF sector went through a painful phase for almost six years after the global financial crisis in 2008. Assets had dropped below Rs 7 lakh crore in this period. In a sharp turnaround, Rs 1.75 lakh crore of new money has come from domestic retail investors in the past two years.
The high growth was largely due to mark-to-market appreciation (revaluation at current prices). Most equity schemes have gained by 13-21 per cent; the performance of debt assets, too, have been commendable, as high as 5.5 per cent during the three months ended July.
Income funds have contributed the largest inflow in the current financial year so far (April-July) at Rs 82,746 crore, against Rs 29,269 crore in the same period a year before. On the other hand, the equity segment took a big hit in this period, as inflow dropped to nearly a fourth, to Rs 10,478 crore from Rs 38,095 crore the previous year.
There has been a notable growth in AUM since the Narendra Modi government took charge in May 2014. During these 26 months, the sector’s asset size grew a little over 50 per cent, from less than Rs 10 lakh crore to the current Rs 15.2 lakh crore.
Sundeep Sikka, chief executive officer (CEO) of Reliance MF, says: “The sector is in a structural growth trajectory. The situation is fast changing, as acceptance of MFs as an investment venue is gaining traction. The rising assets are also a function of market appreciation and continuous growth in investments through the SIP (Systematic Investment Plan) route.”
The MF sector went through a painful phase for almost six years after the global financial crisis in 2008. Assets had dropped below Rs 7 lakh crore in this period. In a sharp turnaround, Rs 1.75 lakh crore of new money has come from domestic retail investors in the past two years.
A Balasubramanian, CEO of Birla Sun Life MF, says: “The credit goes to the hard work by all stakeholders. All asset management companies did what was best for the industry. Continuous investor awareness programmes helped bring in the retail assets. I believe the industry will grow much faster in the next five years than the past five. Retail (individual) investor participation is far higher.”
In July, the total net inflow was Rs 1.02 lakh crore. A majority of it was in liquid and money market funds at Rs 54,212 crore, followed by income funds at Rs 43,913 crore. The equity segment continued to see tough times, on the back of high gross redemptions. Despite robust gross sales in equity schemes, the net inflow in the category was about Rs 2,500 crore, while balanced funds attracted Rs 2,079 crore.
