Mutual Fund Investments: Mutual fund assets in India witnessed a record surge in FY24, as per the Association of Mutual Funds in India’s (Amfi’s) annual report. The assets under management (AUM) soared by Rs 14 lakh crore, marking a remarkable 35 per cent year-on-year (YoY) increase, reaching an unprecedented figure of Rs 53.40 lakh crore.
Reasons for surge
This surge was attributed to the greater participation of retail investors and the buoyant performance of equity markets throughout the fiscal year. Amfi noted that this percentage gain was the highest since fiscal 2021 when the industry witnessed growth of 41 per cent.
The growth trend extended beyond AUM, with the number of investors in mutual funds reaching a record high of 17.78 crore folios, contributing to an investor base expansion of about 4.46 crore individuals. Notably, women constituted around 23 per cent of investors, while men accounted for the remaining 77 per cent.
The adoption of systematic investment plans (SIPs) continued to witness an upward trajectory, with monthly net inflows touching approximately Rs 19,300 crore in March 2024. The cumulative net inflows through SIPs for FY24 stood at an impressive Rs 2 lakh crore, signaling growing investor confidence and a disciplined investment approach.
Individual investors emerged as significant drivers of growth, particularly in equity, hybrid, and solution-oriented schemes, collectively constituting nearly 58 per cent of industry assets and 80 per cent of folio count by March 2024. This underscored the increasing participation of households in the capital markets through mutual funds.
Asset distribution
In terms of asset distribution within mutual fund categories, equity-oriented schemes saw a robust growth of 55 per cent during FY24, reaching Rs 23.50 lakh crore in assets, propelled by substantial inflows and mark-to-market gains.
Debt funds
Conversely, debt funds experienced moderate growth of around 7 per cent during the fiscal, totaling Rs 12.62 lakh crore in assets, following contractions in the preceding two fiscal years. Within the equity segment, the Flexi cap category emerged as the largest fund category, closely followed by large-cap funds, while multi-cap funds exhibited the highest growth rate of 85 per cent.
Hybrid funds
Hybrid funds surpassed the Rs 7 lakh crore mark, recording asset gains exceeding 50 per cent, driven by investors' adoption of an asset allocation strategy and capitalising on arbitrage opportunities in the market. Passive funds, particularly exchange-traded funds (ETFs), continued to benefit from institutional investment flows, with ETFs amassing assets worth Rs 6.64 lakh crore as of March 2024.