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Mutual funds’ asset base swells to ₹19.97 lakh crore

Equity funds continue to attract Indian investors. According to an ICRA study based on Association of Mutual Funds in India (AMFI) data, equity funds (including ELSS) witnessed the highest ever monthly net inflow at ₹12,727 crore in July. This is a jump of 55.9 per cent over June and a whopping increase of 408 per cent over July 2016.

“This comes after more than ₹70,000 crore investments in equities in FY2017,” ICRA said.

The assets under management of the Indian mutual fund industry increased 5.3 per cent to ₹19.97 lakh crore in July from ₹18.96 lakh crore in the previous month.

“Positive investor sentiment and ever-growing popularity of systematic investment plans (SIPs) attracted investments in both debt and equity segments. The industry AUM had touched ₹10 lakh crore in May 2014 and in a short span of three years, it has nearly doubled,” ICRA said.

Small towns are king

The country’s smaller towns or B15 (beyond top-15 cities) locations accounted for 17.7 per cent of the total industry AUM at end-July. “In the last 12 months, B15 towns have witnessed AUM growth of 41.3 per cent or ₹1.05 lakh crore to reach ₹3.60 lakh crore at the end of July, compared with ₹2.55 lakh a year back. The growth has come on the back of special incentives for distributors,” the ICRA note said.

Net inflows through the SIP route also hit an all-time high of ₹4,947 crore in July 2017 — an indication that SIPs have become a preferred investment option for many investors to participate in the country’s buoyant equity market.

Folios too rise

Data from AMFI revealed that in the first four months of FY2018 (April-July), total net inflows through SIPs were ₹18,544 crore and 8.23 lakh SIP accounts were added every month on an average. Average ticket size was ₹3,250 per account, ICRA said. The total folio count at the end of July 2017 was 5.94 crore, which is 2 per cent higher than at June-end, ICRA said after studying the data from SEBI. Around 8.36 lakh and 2.10 lakh new folios were added to the Equity (including ELSS) and Balanced categories, respectively.

Surprisingly, the ELSS category added 3.7 lakh new folios between April-July 2017, possibly due to SIP awareness.

This category normally receives traction during the tax season of January-March. However, the folio count dropped by 2,331 and 1,670 in Gold ETFs and Fund of Funds investing overseas, respectively, from June-end levels. These were the only two categories to witness de-growth in July 2017.

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