Investors have pumped Rs 1.26 lakh crore into mutual funds in November, driving industry assets under management to an all-time high of Rs 21.8 lakh crore. With the latest inflow, total infusion in MF schemes reached Rs 3.8 lakh crore in the first eight months (April-November) of the current fiscal, latest data with Association of Mutual Funds in India (Amfi) showed.
“Mega reform announcements from the government, including PSU bank recapitalisation, Bharatmala Project, have driven expectations of a solid earnings recovery in the next 2-3 years. Sentiments were also boosted by India’s upgrade by Moody’s and continued FPI flows in equities,” Bajaj Capital CEO Rahul Parikh said.
According to the data, investors have poured in a net of Rs 1.26 lakh crore in MF schemes last month as compared to an investment of over Rs 51,000 crore in October. The latest inflow has been mainly driven by contributions from equity, equity linked saving schemes and liquid funds.
Individually, liquid funds or money market category - investments in cash assets such as Treasury Bills, certificates of deposit and commercial paper for shorter horizon - witnessed an inflow of over 77,000 crore.
Besides, equity and equity linked schemes attracted over Rs 20,300 crore. In addition, more than Rs 7,600 crore was invested in balanced funds. Further, over Rs 9,300 crore was put in the debt funds. In contrast, gold ETFs continued to see net outflow of Rs 89 crore. “Lacklustre performance by real estate and gold and low interest rates on traditional savings instruments have also contributed in pushing investor flows into equities. The high inflows also show the popularity of mutual funds as the preferred vehicle for investment in equity and debt,” Parikh said.
The latest inflow has also helped in pushing the asset base of the country’s 42 player mutual fund industry to a historic high of Rs 21.79 lakh crore at the end of November from Rs 21.41 lakh crore in October. “We are particularly excited about the higher retail participation that has contributed to this growth,” Sharekhan Director Investment Solutions - Stefan Groening said.
Going ahead, Parikh said that digital investment platforms are going to be a big driver for the industry. “These platforms are the best bet to attract the young salaried generation of millennial - who otherwise are humongous spenders on gadgets, cars and bikes - and inculcate in them the virtues of saving and investing,” he added.