Ahmedabad: Equity-linked mutual funds, being traditional favourites of Gujarati investors, have predominantly remained a key driver for the rise in total mutual funds’ (MF) assets under management (AUM) in Gujarat. However, with improving maturity among investors and increasing traction towards balanced schemes and multi-asset funds, total AUM continues to grow further.
According to data by the Association of Mutual Funds in India (AMFI) for June and July, total MF AUM in Gujarat increased by Rs 27,630.38 crore and Rs 25,382.6 crore respectively. While equity MFs account for a significant 64% of total AUM in Gujarat, an increased inflow into other MF categories has also propelled the rise in total AUM in MFs in Gujarat. The AUM in July 2024 stood at Rs 4.57 lakh crore here.
Explaining the shift, Kartik Patel, an Ahmedabad-based MF distributor, said, “The interest towards equity MFs is evident among investors from Gujarat and is only growing year after year. However, due to geopolitical uncertainty as well as domestic factors, the investors are treading cautiously and safeguarding their gains. In the process, many investors are re-investing their profit-booked gains into balanced schemes as well as multi-asset funds.”
“From July 2023 to July 2024, multi-asset funds have delivered 25-30% returns whereas balanced schemes have delivered about 15% returns. Therefore, many investors profit-book gains from small-cap, mid-cap and other forms of equity investors and re-invest them into balanced funds to secure returns,” Patel said.
According to AMFI data, AUM of balanced funds in July 2024 stood at Rs 32,244 crore in the state. It has grown about 27% as compared to Rs 25,428 crore in July 2023.
The AUM for equity MF settled at Rs 2.92 lakh crore in Gujarat in July 2024, increasing by Rs 16,674 crore in a single month as compared to Rs 2.75 lakh crore in June 2024, states AMFI data.
Financial advisors also attributed the reasons for the rise in total AUM to the rising interest of the youth in MF investments.
“Youngsters between 25 and 30 years of age are increasingly drawn towards MF investments through lump-sum investments, SIPs and other modes. This is evident with the growing number of new demat accounts. In fact, Gujarat takes the lead in such young investors turning to MF investments for savings and wealth creation purposes,” said Jayesh Vithalani, an Ahmedabad-based financial advisor.
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