New Delhi:
2024 has been a strong year in terms of mutual fund investment. Record-breaking participation from retail investors and flood of SIPs added Rs 17 lakh crore to mutual assets’ assets under management (AUM). According to the data of Association of Mutual Fund Industry (AMFI), investment of Rs 9.14 lakh crore came in the year 2024, whereas last year only Rs 2.74 lakh crore was inflow.
Account of MF Industry in the year 2024
According to AMFI, the number of investors also increased by 5.6 crores, and there was a rapid increase in the number of retail investors investing through SIP. Investments worth Rs 2.4 lakh crore came through SIP alone. These are impressive figures even though it does not include the data for December 2024, which will come in the first week of January 2025.
Mutual fund industry’s AUM at all-time high by the end of November
Due to tremendous investment, by the end of November, the AUM of the mutual fund industry reached an all-time high of Rs 68 lakh crore, which shows a growth of 33% from the end of the year 2023, when the AUM was Rs 50.78 crore. In 2023, there was a growth of 27% in AUM and inflow of Rs 11 lakh crore, the growth in the year 2024 is much higher than this.
7% growth in AUM of mutual fund industry in the year 2022
Going back a bit, the AUM of the mutual fund industry saw a growth of 7% and an increase of Rs 2.65 lakh crore in the year 2022, before this there was a growth of about 22% in the year 2021 and an increase of Rs 7 lakh crore. In the last 4 years, the mutual fund industry has increased its AUM tremendously by Rs 30 lakh crore.
Kaustubh Belapurkar, director-manager, Morningstar Investment Research India, says, ‘The mutual fund industry’s assets are expected to grow at a healthy pace in 2025. With increasing penetration among retail investors, inflows into equity funds, especially through SIPs, are likely to remain strong’
AUM has been increasing for 12 consecutive years
The asset base at the end of December 2022 was around Rs 40 lakh crore, in December 2021 it stood at Rs 37.72 lakh crore, whereas in December 2020 it was Rs 31 lakh crore. The AUM of the mutual fund industry has been growing continuously for the last 12 years, in which equity schemes have played a major role, especially the participation of retail investors through SIPs has written a new history of investment in the mutual fund industry.
Highest investment of Rs 3.53 lakh crore from equity schemes
This year, the maximum investment came from equity schemes at Rs 3.53 lakh crore, hybrid schemes at Rs 1.44 lakh crore and about Rs 2.88 lakh crore from debt schemes. Equity schemes, which were the most attractive factor for investors in mutual funds in 2024, have been witnessing consistent net inflows into the schemes on a monthly basis since March 2021. Monthly SIP contribution crossed the Rs 25,000 crore mark consecutively in October and November, indicating increasing interest from investors.
Gold also attracted the attention of investors
Amid economic uncertainties, geo-political tensions and changes in taxation rules, gold investment has also gained momentum with an inflow of Rs 9,500 crore from investors for safe haven investment. WhiteOak Capital CEO Ashish Somaiya said gold as a portfolio hedge has got a further boost with its inclusion in multi-asset allocation funds.
Also, given that there is uncertainty in US monetary policy, dollar weakness and geo-political concerns coming to the fore from time to time, gold is always a safe bet in customer portfolios.
Zerodha Fund House CEO Vishal Jain says that from April 2025, gold ETFs will be taxed as per the investor’s tax slab for holding period of less than 1 year and 12.5% for holding period of more than 1 year , which will bring them at par with the taxation of equities.
Among debt mutual funds, liquid, ultra-short and short-term funds witnessed huge inflows, with significant participation from institutional investors. Meanwhile, retail investors also showed interest in gilt and dynamic duration funds as they expect a rate cut in the year 2025.