The share of mutual funds in household savings is trending upward, indicating a growing preference for mutual funds as a favoured investment avenue. This trend underscores the belief in the mutual fund industry’s ability to deliver stable returns over the long term, despite short-term market fluctuations, highlighted in the monthly note.
ETMarkets.comThe monthly note also stated that “US has witnessed high inflows towards its debt mutual funds (bonds & money market funds) in YTD June 2024. This is primarily because bond yields are trending at elevated levels, on the expectation of an interest rate cut by US Fed in the second half of the year owing to recessionary concerns. During the same period, the Indian market has seen higher inflows towards equity-oriented funds backed by strong retail participation through the SIP route.”
The SIP assets of industry assets stood at 20.2% against 20.3 in June. SIP accounts totalled 9.34 crore, with the highest monthly net addition in accounts of 35.29 lahks.
The total folio count hit an all-time high and increased by 3.9% to 19.84 crore in July from 19.10 crore folios in June. In July, the industry added 73 lakh folios, with more than 97% coming from equity-oriented schemes and other categories which include passive funds. Equity-oriented schemes alone accounted for nearly 54 lakh new accounts, while the others category contributed approximately 16 lakh accounts.
The mutual fund industry assets were recorded at an all-time high of Rs 64.97 lakh crore led by net inflows in debt-oriented mutual funds, equity-oriented mutual funds and mark-to-market (MTM) gains from equity markets. The folio count crossed a new threshold of 19.84 crore in July.
ETMarkets.com
In the equity mutual fund segment, the assets under management (AUM) were at an all-time high of Rs 29.34 lakh crore (45% of industry AUM) primarily on account of continuous strong inflows and MTM gains. The sectoral/thematic category becomes the largest in the segment with assets of Rs 4.21 crores.The debt mutual fund assets reached an all-time high of Rs 15.44 lakh crore in July. Liquid funds exhibited the highest on-month increase, up 17.4% to close at Rs 4.93 lakh crore. This trend aligns with the pattern of net asset increases typically seen in the month following an advance tax due date when investors look to park surplus funds temporarily.
The assets under management of hybrid funds closed at a fresh high of Rs 8.45 lakh crore. Inflows into the category was Rs 17,436 crore. Arbitrage and multi-asset allocation funds accounted for 82% of inflows in the category.
For the passive funds, the assets under management was at a record high of Rs 10.95 lakh crore (17% of industry AUM). Index funds lead inflows, led by investor interest in NFOs. Gold ETFs witnessed the highest-ever inflows of Rs 1,337 crore in July.
“The mutual fund industry has demonstrated growth with retail investors consistently embracing mutual funds as a reliable investment avenue. It’s evident that mutual funds have become an integral part of retail investors’ financial strategies. SIP contributions reaching an all-time high of Rs 23,331.75 crores in July 2024 reflect the growing financial discipline among retail investors, helping them build wealth systematically over time. As we continue to navigate an ever-evolving market landscape, the industry’s focus remains on empowering investors and fostering long-term financial well-being, said Venkat N Chalasani, Chief Executive – AMFI.