The Assets Under Management (AUM) of the Indian mutual fund (MF) industry witnessed an exceptional growth of 42% in FY2017. According to Association of Mutual Funds in India (AMFI) data, AUM grew from Rs. 12.3 lakh crore in March 2016 to Rs. 17.5 lakh crore in March 2017. The Quarterly Average Assets Under Management (QAAUM) also registered a QoQ growth of 8% in the last quarter of FY2017. The growth can be attributed to strong retail participation and overall market gains.
FY2017 turned out to be a very good year for the mutual fund industry with investors pouring in Rs. 3.4 lakh crore across categories. The net inflows in Liquid, Income and Equity (including Equity Linked Savings Schemes or ELSS) categories have been to the tune of Rs. 1.2 lakh crore, Rs. 0.96 lakh crore, and Rs. 0.70 lakh crore, respectively.
Equity category witnesses net inflows in all months of FY2017
Equity funds (including ELSS) witnessed net inflows of Rs. 8,216 crore in March 2017 compared with Rs. 6,462 crore in February 2017. In March 2017, the assets of Equity funds (including ELSS) reached an all-time high of Rs. 5.4 lakh crore. The category witnessed MoM jump of 4.5% and YoY growth of 40.7%.
In FY2017, total inflow in the category has been Rs. 70,367 crore with net inflows in every month. Retail participation in the Equity category is high because of the popularity of the Systematic Investment Plan (SIP) route. According to AMFI, the mutual fund industry added about 6.2 lakh SIP accounts every month on an average during FY2017 (till February 2017), with an average ticket size of Rs. 3,100 per account.
MF industry adds 77.4 lakh folios in FY2017
The total folio count at the end of March 2017 stood at 5.54 crore, 1.9% higher than February 2017, according to data from the Securities and Exchange Board of India (SEBI). In FY2017, the mutual fund industry added 77.4 lakh new folios or around 6.4 lakh new folios every month despite volatility in overall market conditions.
March 2017 saw the highest number of folios added in a month in FY2017 at 10.1 lakh. The growth was driven by the ELSS category that added 3.2 lakh folios in the month. Out of the 10.1 lakh folios, 7.4 lakh came from the Equity (including the ELSS) category. The folio count for the Liquid category more than doubled in FY2017, suggesting retail investors are looking at this route for surplus cash deposit.
SEBI survey throws light on investor behaviour
SEBI’s Investor Survey (SIS) 2015 had some key findings on mutual fund investors. Among the 5,356 respondents with financial investments, around 66% (or 3,536 investors) have put money in mutual funds, making MFs the most favoured financial instrument among Indian investors.
The survey found that 42% of the mutual fund investors are regular investors; 60% of them prefer the SIP route; 88% are aware that schemes can be bought and sold online, but the medium is not used frequently; 24% use exchanges and platforms offered by stock exchanges for their investment; 58% claimed that they will continue with their investment even in market volatility, but only 25% hold onto their investments beyond three years.