Edited by: Namit Singh Sengar
Last updated: January 11, 2023, 6:40 PM IST
The assets under management (AUM) of the mutual fund industry increased by 5.7% to total ₹39.88 lakh crore in 2022.
This was much lower than a nearly 22% increase or an increase of nearly ₹7 lakh crore in the asset base to ₹37.72 lakh crore in 2021.
According to Association of Mutual Fund Industry (AMFI) data, the mutual fund industry added ₹2.2 lakh crore to its asset base in 2022, driven by a consistent monthly increase in Systematic Investment Plan (SIP) flows.
Some experts believe that asset base growth in 2023 will be driven by economic growth and retail participation by young investors.
TS Ramakrishnan, Managing Director and CEO, said: “While mutual fund assets under management grew by 5.7%, retail assets under management grew by ~20%. The penetration of SIP has resulted in an increase in retail participation. Through digital marketing, the industry has been able to reach a wider audience and thus democratize mutual funds.”
Increased awareness of equities and their ability to create wealth over the longer term has led to this increase in inflows into equity-focused schemes in 2022.
“We think the number of SIPs will continue to grow this year as well. There is a shift in the mindset of investors to see mutual funds as a long-term wealth creation tool, which will lead to an increase in the sector’s assets under management,” Ramakrishnan added.
“The maturation of the private investor is the reason for the continued inflow into equities. 2022 was a volatile year. People have used corrections to lower the average and keep adding money,” said Radhika Gupta, MD and CEO of Edelweiss AMC.
Also Read: How To Save Your Hard-Earned Money From Online Fraud?
While the growth of the 42-player mutual fund space in 2021 was mainly supported by a rally in the equity markets. The asset base increase in 2022 is mainly a result of advanced SIP flows, which reached ₹13,000 crore in November for the second time in a row.
Akhil Chaturvedi, CBO, Motilal Oswal Asset Management Company, said equity funds saw a jump in net inflow from 2.2 thousand crores in November to 7.3 thousand crores in December. This was led by increased inflows into mid- and small-cap categories, which are starting to look attractive in terms of valuations after the recent decline.
“We are also seeing the highest inflows in our Midcap fund, in line with the overall industry. SIPs continue to create new milestones with over 13,000 crores in inflows for the third consecutive month. This highlights the strong domestic flows that have also helped wipe out recent sales by FIIs,” Chaturvedi said.
Moreover, the number of investors is estimated to have increased by 2 crore to reach 14.11 crore by 2022. In 2021, a total of 2.6 crore folios have been added.
Share schemes have received an inflow of ₹ 1.61 lakh crore last year, up from ₹ 96,700 crore in 2021.
The plans have witnessed continuous net inflows since March 2021 and prior to that, the equity plans had witnessed outflows for eight consecutive months due to the Covid pandemic.
During the calendar year, SIP inflows averaged over ₹12,500 crore per month, enabling investors to stay in the stock market and benefit from Rupee cost averaging. Steady inflows indicate resilience in domestic inflows, which strongly counterbalanced selling by Foreign Portfolio Investors (FPIs).
In 2022, the total net flow to all mutual funds was ₹71,443 crore, with positive inflows into equity schemes (₹1.61 lakh crore), index funds and ETFs (₹1.65 lakh crore) and negative inflows into debt schemes (₹2.5 lakh crore).
(with PTI inputs)
Read all the latest business news here