Equity MFs See Investment Grow Over 5-Fold To Rs 94,151 Crore In Q1, AMFI Data Reveals

The industry’s assets under management (AUM) surged 59 per cent to touch Rs 27.68 lakh crore in the June quarter, up from Rs 17.43 lakh crore logged in the same quarter a year earlier

Experts said that government’s fiscal policies such as a tax collection growth surpassing the budgeted estimated, reduced revenue expenditures, and higher capital spending helped make the investment more attractive. (Image Source: Smallcase)

Source : Smallcase

Equity mutual funds lured in more investors as investment in the segment climbed more than five-fold to touch Rs 94,151 crore in the April-June quarter, against an infusion of Rs 18,358 crore seen in the corresponding quarter a year earlier, data from the Association of Mutual Funds in India (AMFI) showed.

This inflow was attributed to a robust economic environment, favourable government fiscal policies, strong returns in the stock market, and investors’ confidence, reported PTI. As such, the industry’s assets under management (AUM) surged 59 per cent to touch Rs 27.68 lakh crore in the reviewing quarter, up from Rs 17.43 lakh crore logged in the quarter ended June 30, 2023 a year earlier.

The number of equity folios also climbed to 13.3 crore, with an addition of more than 3 crore in the investor base, the data revealed. 

Elaborating on the rise in investor participation, Trivesh D, COO, Tradejini, noted, “The significant gain in equity folios indicates broader participation across investor segments, driven by improved financial literacy and accessible investment platforms. The confluence of political stability, supportive government policies, and a favourable economic environment has significantly contributed to the impressive inflows into equity mutual funds, signalling a positive outlook for the sector.”

Explaining the factors behind this rise in interest in equity mutual funds, Feroze Azeez, Deputy CEO, Anand Rathi Wealth, said that robust economic fundamentals, backed by government’s fiscal policies such as a tax collection growth surpassing the budgeted estimated, reduced revenue expenditures, and higher capital spending helped make the investment more attractive. 

Sharing an outlook for the sector, Azeez noted, “Additionally, the shift was further fuelled by a transition from traditional investments like deposits to mutual funds in pursuit of higher returns.The long-term outlook remains positive, with expectations of 11-13 per cent annual returns for Indian equities, and equity mutual funds potentially delivering even higher returns.”