Mutual funds' assets base surged to over Rs 23 lakh crore in 2017-18, adding Rs 4.75 lakh crore to the kitty, due to a spirited investor awareness campaign by the industry and strong participation from smaller towns.
Moreover, fund houses may see robust growth in AUM (asset under management) in the current financial year too, as the penetration levels of mutual funds are still very low in the country.
Total AUM of all the fund houses put together soared by Rs 4.75 lakh crore, or 26 per cent, to Rs 23.05 lakh crore at the end of just concluded fiscal on March 31, 2018 from Rs 18.30 lakh crore in financial year 2017, latest update with Association of Mutual Funds in India (Amfi) noted.
Harsh Jain COO at Groww, an online mutual fund investment platform, attributed the impressive surge in assets base to investor awareness campaign by the industry, role played by mutual fund distribution platforms, demonetisation effect and strong retail participation from retail investors, especially from smaller towns.
Besides, investors are now shifting from traditional asset classes such as real estate and gold to financial asset class, he added.
Moreover, a sharp rise in systematic investment plans (SIPs) promoted more sustainable growth for the industry as more people moved away from the concept of large lump sum investments.
The industry has seen an overall addition of 32 lakh new investors over the last one year, while the total number of folios grew by 1.05 crore or 26 per cent during the period.
The SIP accounts grew by 70 lakh to 2.05 crore in the fiscal 2018. Besides, SIP contribution for the industry surged to Rs 6,425 crore in 2017-18, compared to nearly Rs 44,000 crore in the preceding fiscal.
Among the top five players, ICICI Prudential MF led the pack with asset base of Rs 3,05,739 crore (excluding Fund of Funds) followed by HDFC MF (3,00,549 crore), Reliance MF (Rs 2,44,903 crore), Aditya Birla Sun Life MF (Rs 2,47,529 crore) and SBI MF (Rs 2,17,649 crore).
Going ahead, Jain said that lower penetration of mutual funds in India will drive growth along with increasing levels of financial literacy.
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