Investors have pumped in close to Rs 62,000 crore into various mutual fund (MF) schemes in August, driven by equity and money market funds.
With this, total net inflow in MF schemes has risen to Rs 2.2 lakh crore in the first five months (April-August) of the ongoing fiscal, as per the latest data available with Association of Mutual Funds in India (Amfi).
“The Indian mutual fund industry has been witnessing phenomenal growth since 2014. The last three years and especially 2016 have been characterised by large inflows into equity and balanced funds, with increasing participation from retail and HNI investors,” Kaustubh Belapurkar, Director Manager Research at Morningstar said.
Bajaj Capital CEO Rahul Parikh said that Indian investors have now eventually assimilated mutual funds and the credit goes to awareness programmes and endeavours by regulators and asset management companies.
According to data from Amfi, investors have poured in a net of Rs 61,701 crore in MF schemes last month as compared to Rs 63,504 crore in July.
The latest inflow has been mainly driven by contribution from liquid funds and money market funds. Besides, investors continued to maintain bullish stance on the equity schemes.
Liquid or money market fund category witnessed Rs 21,352 lakh crore being poured in last month. In addition, equity and equity linked schemes attracted Rs 20,362 crore. Further, balanced and debt funds received Rs 8,783 crore and Rs 8,390 crore respectively.
However, gold ETFs continued to see net outflow of Rs 58 crore, Parikh said. Liquid and money market funds invest mainly in money market instruments like commercial papers, treasury bills, term deposits and certificate of deposits. These funds have a lower maturity period and do not have any lock-in period.
Over the last few years, markets regulator Sebi has been taking measures to increase mutual fund penetration in smaller cities and getting newer investors into the fold by allowing for an additional 30 basis points expense and two basis points towards investor education.
The move seem to be paying off as there has been a rapid rise in the no of new folios as well as increasing share of assets from smaller cities (termed at B-15 cities), which now account for 18 per cent of the overall assets base.
Overall, the assets under management (AUM) of the MF industry, comprising 42 players, reached to an all time high of Rs 20.6 lakh crore in August-end from Rs 19.97 lakh crore at the end of July.