Historic Growth in Mutual Fund Industry
The Indian mutual fund industry has achieved a remarkable milestone, with its assets under management (AUM) surpassing Rs 50 lakh crore in December 2023. This growth is a significant indicator of the industry’s robustness and investor confidence.
Surge in Systematic Investment Plans (SIPs)
A key factor in this achievement is the exponential growth in Systematic Investment Plans (SIPs). The monthly gross SIP inflows, which were nearly Rs 8,000 crore in FY 2019-20, soared to an all-time high of Rs 17,610 crore in December 2023. The total SIP inflow for 2023 stood at Rs 183,741 crore, a substantial increase from Rs 149,437 crore in 2022. T v he SIP AUM alone reached Rs 10 lakh crore as of December 2023.
Equity and Debt Mutual Fund Flows
Equity mutual funds experienced a robust inflow of Rs 161,573 crore in 2023. This influx can be attributed to the strong performance of the Indian market, with major indices like the Sensex and Nifty registering around a 20% gain each. However, debt mutual funds witnessed a net outflow of Rs 46,089 crore during the year.
Among various categories, large & mid cap funds, multi-cap funds, and mid cap funds received healthy net inflows, whereas debt funds saw significant outflows, particularly from liquid funds.
Investor Base and Future Outlook
The number of unique mutual fund investors more than doubled in the last five years, growing from 1.91 crore in December 2018 to 4.21 crore in December 2023. AMFI’s chairman Navneet Munot expressed confidence in the industry’s potential to reach a Rs 100 lakh crore AUM and expand the investor base to 10 crore in the near future.
Retail Mutual Funds and New Fund Offerings (NFOs)
Retail mutual fund folios hit an all-time high of 13.18 crore, with the retail AUM growing to Rs 29 lakh crore. December 2023 witnessed the launch of 21 NFOs, collectively raising Rs 9,900 crore. Additionally, the total number of mutual fund folios across all categories reached a record 16.50 crore.
SIP Contributions and Accounts
The SIP contributions in December 2023 surged to a record Rs 17,610 crore. The number of SIP accounts also peaked at 7.63 lakh crore, with the SIP AUM growing to Rs 9.95 lakh crore. The industry added 40 lakh new SIP accounts during this period, demonstrating the growing popularity of SIPs as an investment choice.