Mutual fund industry’s asset base rose to an all-time high of Rs 17.89 lakh crore at the end of February, primarily on account of strong inflows in equity, income and money market segments.
The industry, comprising 43 active players, had an average assets under management (AUM) of Rs 17.37 lakh crore at January-end, the latest data of the Association of Mutual Funds in India (AMFI) showed. Industry experts attributed the monthly rise in asset base to inflows in income and equity categories.
Besides, buoyant investor sentiment and phenomenal growth in systematic investment plans (SIPs) also helped in the growth of assets under management, they added.
“Continued positive net inflows in long-term assets like Equity and Balance funds are an indicator that ‘India is using mutual funds as long-term savings vehicle’,” Bajaj Capital National Head Mutual Funds Anjaneya Gautam said.
“With balance funds are fast catching up with equity funds in terms of getting almost same fresh flows. It indicates asset allocation approach is setting in among investors,” he added.
The industry AUM had crossed Rs 10 lakh crore in May 2014, and it is expected to reach Rs 20 lakh crore this year.
“The asset under management of the mutual fund industry is quite likely to cross the Rs 20 lakh crore mark in 2017,” Quantum Mutual Fund Chief Executive Jimmy Patel said.
Overall 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 Rs 10,864 crore coming in while liquid funds or money market category, 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.
Further, equity and equity-linked saving schemes saw an infusion of Rs 6,462 crore. However, gilt and gold exchange-traded funds (ETFs) witnessed a pull out of Rs 772 crore and Rs 46 crore, respectively during the period under review.
Mutual funds are investment vehicles made up of a pool of funds collected from a large number of investors. The funds are invested in stocks, bonds and money market instruments, among others.