Following a smart turnaround in 2013 with an increase of over Rs 1 lakh crore in its asset base to nearly Rs 9 lakh crore, the mutual fund industry is looking forward to 2014 in the hope that it would be even better.
MF industry's assets under management hit a record high of Rs 9.58 lakh crore in August 2013 and have remained near Rs 9 lakh crore as the year draws to a close.
Fund houses are upbeat about an even better performance in 2014 on account of various measures initiated by market regulator Sebi as well as plans of individual players to expand the distribution network across the country, particularly to smaller cities.
Industry body AMFI (Association of Mutual Funds in India) Chairman and leading fund house Reliance MF chief Sundeep Sikka said that "2014 would be one of the best year for the mutual fund industry as markets are moving in the upward direction".
Market participants are optimistic about equity schemes in 2014 on hopes that a stable government - to be set up after the general elections in the first half - will help boost the stock markets. Debt funds are also expected to continue attracting investors in the first half of the new year.
In 2013, the total assets under management (AUM) of all fund houses put together soared by 11 per cent on strong inflows in categories such as bonds and liquid funds, industry estimates show.
This was the second consecutive yearly rise in the industry AUM, after a drop in the assets base for two preceding years.
The total industry AUM stood at Rs 8.08 lakh crore at the end of 2012, while the same was Rs 6.11 lakh crore at 2011-end. It was about Rs 6.26 lakh crore in 2010 and Rs 6.65 lakh crore in 2009.
Mutual funds collect money from investors and later invest the same into various market segments including stocks, IPOs (primary market) and bonds.
Market participants said that with elections on the anvil an element of 'uncertainty' could prevail for the mutual fund industry for the next quarter or so in.
"I am very positive and confident that 2014 would be a very good year for the mutual fund industry," Axis Mutual Fund MD and CEO Chandresh Nigam said.
However, PwC India Asset Management Leader Gautam Mehra said: "With elections on the anvil, an element of 'uncertainty' could prevail for the next quarter or so."
During 2013, the performance of the mutual fund industry has, to an extent, mirrored the performance of the Indian economy, the stock markets and the FII investment flows.
