In the last fiscal, Sensex managed to rise just 0.72 per cent even though investors’ wealth eroded by Rs 5.86 lakh crore.
Of the total AUM, retail AUM across equity, hybrid and solution-oriented schemes stood at Rs 20,34,533 crore and the average AUM rose to Rs 20,45,632 crore.
The biggest contributor was SIPs, which rose to a record Rs 14,276.06 crore in March, taking the overall AUM to Rs 6,83,296.24 crore.
Amfi chief executive N S Venkatesh told reporters that the growing investors’ base shows their continuing faith in the equity markets via the mutual funds route. While equity-oriented mutual funds registered a net inflow of over Rs 2,00,000 crore in FY23, SIP inflows continued to soar, breaking the record on a month-on-month basis, he added.
The number of investors rose despite the market volatility due to global geo-political reasons and inflation, and this is also a cue to the resilient investor behavior, he added.
Venkatesh expressed confidence in inflows continuing in FY24 at a reasonable pace, saying there is no reason to believe that the growth momentum will not be maintained. The number of SIP accounts stood at 6.36 crore as of March and the number of new SIPs registered were 21.65 lakh.
The industry saw as many as 43 new schemes being launched during the fiscal, including 22 open-ended funds and 21 close-ended schemes, and raised Rs 8,496 crore from the market.
On a monthly basis, for the 25th month in a row, equity mutual fund inflows jumped to a 12-month high in March and net investments in equity and equity-linked schemes rose 31 per cent to Rs 20,534.2 crore over the previous month.
This was the highest since Rs 28,463 crore in March 2022. Against this the Sensex and the Nifty rose 4.88 per cent and 3.37 per cent, respectively, in March.
G Pradeepkumar, chief executive at Union AMC, said net inflows reinforce the belief that domestic investors continue to have high level of confidence in mutual funds as an effective vehicle for wealth creation.
From a low of about Rs 2,250 crore in November 2022, net inflows into equity funds rose steadily every month, which augurs well for the future of the equity markets, he said.
On the fixed income side, there was unusual interest to invest in bond funds, primarily due to changes in taxation from April. However, given the relatively higher yield levels and the possibility of interest rate hikes nearing the end of the cycle, there can be sustained interest in fixed income funds for some more time, he added.
Ajaykumar Gupta of Trust Mutual Fund attributed the churn in the overall AUM to the changes in tax laws.
According to him, while the cash category saw an outflow of Rs 65,000 crore in March, the arbitrage funds and funds with maturity of less than one year, saw outflows of Rs 12,000 and Rs 28,000 crore, respectively.
However, he said a large portion of these outflows channelled back into duration funds like corporate bond, banking and PSU funds, dynamic bond, long duration and Gilt funds which saw inflows totalling Rs 39,000 crore.
With an inflow of Rs 27,000 crore, the target maturity/index funds were the largest beneficiary as investors re-allocated funds in the long duration funds to avail indexation benefits, he said.
