Mutual fund assets increase 34% during FY24, the highest in 7 years

Q4 average AUM surges to Rs 54 trillion on back of strong inflows, market rally

The assets managed by domestic mutual funds (MFs) rose by 34 per cent during 2023-24 (FY24) — the most since 2016-17 — propelled by a sharp rally in the equity market and robust inflows.

For the three months ended March 2024 (Q4FY24), the average assets under management (AUM) stood at Rs 54.1 trillion compared to Rs 40.5 trillion in Q4 of 2022-23 (FY23), according to data from the Association of Mutual Funds in India.

The just-concluded FY24 marked the 12th consecutive year of AUM growth for the industry, which primarily caters to retail investors. The industry last recorded a decline in year-on-year AUM in 2011-12. Although the MF industry has made huge strides, its AUM still represents only around a quarter of the total deposits with banks.

 

The largest fund house, SBI MF, maintained its lead with an average AUM of Rs 9.1 trillion in Q4, 27 per cent higher than the same quarter of FY23.

Among the top 10, fourth-placed Nippon India recorded the fastest growth. Its average AUM surged by 47 per cent to Rs 4.3 trillion. In the top 15, Tata MF led with nearly a 50 per cent average AUM gain.

MF AUM moves depending on investor flows and market movements. In FY24, the equity market witnessed a stellar rally, with the benchmark National Stock Exchange Nifty 50 rising by 29 per cent, marking its best performance since the pandemic-affected 2020-21.

The broader market Nifty Smallcap 100 and the Nifty Midcap 100 gained by 70 per cent and 60 per cent, respectively.

Meanwhile, on the inflow front, MFs received a net of Rs 5.1 trillion in the first 11 months of FY24. Actively managed equity schemes attracted Rs 1.6 trillion of these. The gross inflows through the systematic investment plan route amounted to Rs 1.8 trillion during the April 2023-February 2024 period, 15 per cent higher than the FY23 tally.

The flow data for March is due to be released next week. Judging by MFs’ record equity market deployment in March, the industry is expected to have seen a sharp surge in equity scheme inflows.

An analysis by Business Standard in February revealed that the sharp surge in MF assets since February 2023 was largely due to mark-to-market gains in equity assets.

While MFs received Rs 3.86 trillion in net inflows during the February 2023-January 2024 period, the AUM surged by Rs 13 trillion owing to market-driven gains.