The assets managed by domestic mutual funds (MFs) rose 34 per cent during fiscal 2023-24 (FY24)—the most since FY17—on the back of a sharp rally in the equity market and robust inflows. For the three-month period ended March 2024 (Q4FY24), the average assets under management (AUM) stood at Rs 54.1 trillion compared with Rs 40.5 trillion in Q4 FY23, shows data from the Association of Mutual Funds in India (Amfi).
The just-concluded FY24 was the twelfth consecutive year of AUM growth for the industry, which provides investment solutions to largely retail investors. A decline in year-on-year AUM was last recorded in FY12. While the MF industry has come a long way, its AUM is still around a quarter of the total deposits with banks.
The largest fund house, SBI MF, maintained its lead with an average AUM of Rs 9.1 trillion in Q4, 27 per cent higher than in the same quarter of FY23. Among the top 10, fourth-placed Nippon India grew the fastest. Its average AUM surged 47 per cent to Rs 4.3 trillion. In the top 15, Tata MF led with nearly 50 per cent average AUM gain.
MF AUM moves depending on investor flows and market movements. In FY24, the equity market saw a stellar rally. The benchmark Nifty 50 index rose 29 per cent, its best performance since the Covid-affected 2020-21. The broader market Nifty Smallcap 100 and the Nifty Midcap 100 index gained 70 per cent and 60 per cent, respectively.
Meanwhile, on the inflow front, MFs received a net of Rs 5.1 trillion in the first 11 months of FY24. Actively-managed equity schemes garnered Rs 1.6 trillion of these. The gross inflows through the systematic investment plan (SIP) route came in at Rs 1.8 trillion during the April 2023-February 2024 period, 15 per cent higher than the FY23 tally.
The flow data for March is due to be released next week. Going by MFs’ record equity market deployment in March, the industry is expected to have recorded a sharp surge in equity scheme inflows.
An analysis by Business Standard in February showed that the sharp surge in MF assets since February 2023 was largely on account of mark-to-market gains in the equity assets.
While MFs received Rs 3.86 trillion net inflows during the February 2023-January 2024 period, the AUM surged by Rs 13 trillion owing to market-driven gains.
First Published: Apr 04 2024 | 6:58 PM IST