The asset under management of the mutual fund industry has surged 24 per cent to ₹49.05-lakh crore in November against ₹39.62-lakh crore in January backed by huge rally in the equity markets and substantial jump in inflows.

The net inflows into the mutual fund industry so far this year more than doubled to ₹25,616 crore last month against ₹ 11,373 crore in January. On a year-on-year basis, net inflows were up 93 per cent as compared with ₹13,264 crore in November 2022.

The AUM of the mutual fund industry has already close to half-way mark of the next industry target of ₹100-lakh crore.

A Balasubramanian, Managing Director, Aditya Birla Sun Life AMC, said SIP will slowly become a way of investment in equity with more new customer addition and existing investors allocating more due to their positive experience.

Gaining traction

Fixed income investment will also gain traction next year while the equity market return tends to be weak as the market has already priced in the positives post-elections, he said.

G Pradeepkumar, CEO, Union Asset Management Company, said the buoyancy in the mutual fund industry will continue on the back of strong economic growth and stable systematic investment plan inflows that can add up to ₹2-lakh crore after accounting for an average investment of ₹ 17,000 crore a month.

Moreover, he said there are investors with surplus funds waiting to enter market whenever there is a fall in market but the current bull-run in small- and mid-cap space may not sustain for long while the large-cap valuation looks attractive.

Sunil Subramaniam, MD & CEO, Sundaram Asset Management Company, said after the recent election results in four States foreign investors investments have popped up on expectations further policy reform and favourable crude oil prices with Venezuela producing more after removal of economic sanctions by the US.

Flows through monthly SIP should touch ₹20,000 crore-mark in the first half of next year with domestic MF distributors pushing it hard, he said

The corporate results for the December quarter will be crucial as it will set the tone for the first half of the calendar year and the concern on high valuation will fade away slowly if it comes good, he added.

However, he said general elections in India and the US will be key factor to be watched as the new government sworn-in will present the full-fledged Budget, which may or may not favour the markets, leading to possible profit-booking.

Growth momentum

Ashwini Kumar, Head Market Data, ICRA Analytics, said the new year is expected to be eventful with inflows mimicking the interest rate movements.

Backed by strong macroeconomic fundamentals of the Indian economy and resilient earnings growth, the mutual fund industry is likely to sustain its growth momentum next year.

Misbah Baxamusa, CEO, NJ Wealth, one of the largest MF distributor, said SIP in mutual funds is an indispensable instrument to build wealth in the long-term and investors must analyse their risk profile to follow a need-based investing approach.

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