AUM of mutual funds crossed Rs.50 lakh crore

Mumbai: The year 2023 is going to be a memorable one for the country's mutual fund industry. Assets under management (AUM) of the mutual fund industry crossed the Rs 50 trillion mark in December, industry sources said. The AUM stood at Rs 49.04 trillion at the end of November. The end of December figure will be announced by the Association of Mutual Funds in India (AMFI) in January.

Sources added that the recent rally in the market has provided support for AUM crossing the Rs 50 trillion mark. Systematic Investment Plan (SIP) is becoming a buzzword in the mutual funds industry.

At the end of 2017, the AUM number which was Rs 21.26 trillion has increased by 135 percent to Rs 50 trillion at the end of 2023. In this period, Sensex has increased by 100 percent from the level of 34057 and has crossed 70,000.

Along with the AUM, the number of investors in the capital market through mutual funds has also increased tremendously. Sources further said that the number of mutual fund folios increased by 150 percent to 15.70 crore from the end of 2017 to the end of 2023.

A strong rally in the country's stock market over the past decade has resulted in significant returns for investors through mutual funds.

Investors are getting hedging against inflation due to higher returns, said a fund house manager. In 1993, SEBI formulated the first such regulations for mutual funds and since then it has been continuously revised.

Amid the growing interest of retail investors in equity mutual fund schemes, systematic investment schemes are gradually strengthening their grip on the mutual fund industry. Within a year, the share of Systematic Investment Plans (SIPs) in total mutual fund assets rose to 19.1 per cent in November from 16.1 per cent at the start of 2023. At the end of 2019, this share was around 12 percent.

According to data from Amphi, retail investors are generally opting for the SIP route and their numbers are increasing and existing investors are also increasing their investments. The monthly SIP investment continues to grow and in January 2021, it will reach Rs. 8,023 crore in November 2023 as compared to Rs. 17,073 crore has been reached.

The total AUM of SIP accounts in November was Rs. 9.3 lakh crore, which is 38 percent higher than the beginning of the calendar year. SIP AUM has grown by over 19 per cent every year since 2018 and in 2021, it recorded the highest jump of 42 per cent.