Asset tally led by record investor participation in equity oriented MFs

The Indian mutual fund industry assets doubled in the last three years to cross the historic Rs 20.59 trillion summit in August 2017, and stand at Rs 20.40 trillion as of September 2017. The asset tally has been led by record investor participation in equity oriented mutual funds (includes equity, balanced and equity oriented exchange traded funds). Equity oriented funds saw uninterrupted (on consolidated basis) stream of inflows totaling at Rs 4.18 trillion in the 3-year period and Rs 4.53 trillion since May 2014 (start of the inflow rally), a far cry from yesteryears when market volatility used to dampen investor sentiment. These robust inflows coupled with mark to market gains has pushed the category assets by almost 2.8 times or 41% CAGR to record high of Rs 8.49 trillion as of September 2017. The recent spurt in growth of the category has propelled its share in total industry AUM to 42% from 32% a three years ago.

Sticky money in the form of SIP and pension money aid equity mutual funds

A positive trend of the industry inflows and growth has been the influx of robust sticky money in the form ofstrong systematic investment plans (SIP) money and introduction of pension money into equity orientedmutual funds. As per data disclosed by AMFI, the industry has been witnessing progressive increase in SIPinflows cumulating Rs 732 billion in past 18 months ended September 2017. Further introduction ofinvestment into equity by the Employee Provident Fund Organisation (EPFO), the biggest retirement managerin the country, through equity oriented exchange traded funds (ETFs) since August 2015 have also aided theindustry and category growth. Equity oriented ETF assets have risen by almost eight times to Rs 552 billionsince then.