In line with the continued inflow of retail money into equity and debt mutual funds (MFs) and a sharp rise in the stock markets over the last two months, the assets under management (AUM) of the Indian MF industry rose to an all-time high of Rs 17,89,047 crore at the end of February 2017.
According to the AUM data released by the Association of Mutual Funds of India, over the last two months, the industry AUM has risen by Rs 1,42,710 crore from Rs 16.46 lakh crore at the end of December 2016 to Rs 17.89 lakh crore. It stood at Rs 17.37 lakh crore at the end of January 2016.
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While the net inflows (across all schemes) in January and February 2017, amounting to an aggregate of Rs 84,090 crore, lifted the asset base, the AUM also jumped on account of gains resulting from almost 8-10 per cent rise in the benchmark indices.
The Sensex at BSE rose 7.95 per cent in January and February and BSE 200 Index rose 9.9 per cent in the same period. The impact of market movement in AUM growth can be seen from the fact that, while the net inflow into equity MFs in the last two months stood at Rs 9,179 crore, the AUM of equity-oriented MFs rose by Rs 43,734 crore during this period. Similarly, in case of equity-linked savings schemes, the AUM addition stood at Rs 6,611 crore as against net fresh inflows of Rs 2,163 crore.
While the industry AUM crossed Rs 10 lakh crore mark for the first time in May 2014, following the inflows and rise in markets, it has risen by 7.77 lakh crore or 77 per cent since then. The gains for equity oriented schemes have been higher than the overall growth and has jumped 144 per cent (2.74 lakh crore) from Rs 1.89 lakh crore in May 2014 to Rs 4.63 lakh crore in February. During this period fresh inflows into equity oriented schemes stood at a high of Rs 1.89 lakh crore.
In February, the net inflow in mutual fund schemes stood at Rs 30,273 crore in last month. Of this, income funds, which invest in a combination of government securities saw inflows of Rs 10,864 crore while liquid funds or money market category that invest in cash assets such as treasury bills, certificates of deposit and commercial paper for short investment horizon, witnessed an infusion of Rs 8,227 crore. The equity and equity-linked saving schemes saw an aggregate infusion of Rs 6,462 crore.
The gilt and gold exchange-traded funds (ETFs) witnessed net outflow of Rs 772 crore and Rs 46 crore, respectively during February. Industry experts attributed the monthly rise in asset base to inflows in income and equity categories and say that buoyant investor sentiment and growth in systematic investment plans (SIPs) also helped in the growth of assets under management.
Sundeep Sikka, CEO and executive director, Reliance Nippon Life AMC said that the industry is likely to double its base over the next three years and will reach an AUM of Rs 20 lakh crore faster than expected.
“The growth in MF folios has been muted at around 2 per cent CAGR in last 5 years. We see this increasing aggressively through industry initiatives… The industry may see the investor base doubling in next three years,” said Sikka while speaking at the at the launch of Mutual Fund Day initiative that encourages investors to mark 7th of every month as a date for making investments in mutual funds.