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Monthly SIP contributions persistently surpassed the Rs 25,000-crore mark in October and November, signalling their rising attraction
Mutual Fund Growth In 2024: The yr additionally marked the twelfth consecutive yearly rise within the trade AUM after a drop in two previous years.
Mutual Fund Growth In 2024: After a stellar 2023, the mutual fund trade sustained its development momentum in 2024 with a powerful Rs 17 lakh crore surge in property, pushed by buoyant fairness markets, sturdy financial development, and growing investor participation. Experts are predicting the optimistic development will lengthen into 2025.
Substantial Inflows and SIP Growth
The year 2024 noticed a considerable internet influx of Rs 9.14 lakh crore, alongside a major 5.6 crore improve in investor rely and a rising reputation of SIPs, which alone contributed Rs 2.4 lakh crore, in line with knowledge from the Association of Mutual Fund Industry (Amfi), as reported by information company PTI in an evaluation.
Continued Growth Expectations for 2025
Kaustubh Belapurkar, Director-Manager Research at Morningstar Investment Research India, stated, “The mutual fund trade’s property are anticipated to proceed rising at a wholesome tempo in 2025. With rising penetration amongst retail buyers, flows into fairness funds, notably via Systematic Investment Plans (SIPs), are more likely to stay sturdy.”
AUM Reaches All-Time High
The inflows lifted the trade’s property beneath administration (AUM), reaching an all-time excessive of Rs 68 lakh crore by November-end, marking a 33 per cent development over the Rs 50.78 lakh crore registered on the finish of 2023.
Comparison with Previous Growth Trends
This development was approach greater than 27 per cent rise and Rs 11 lakh crore addition in AUM in 2023, in addition to the extra modest development in earlier years.
The trade noticed a 7 per cent development and Rs 2.65 lakh crore improve in AUM in 2022, in addition to practically 22 per cent development and near Rs 7 lakh crore addition to the asset base in 2021.
Consistent Upward Trajectory
Over the final 4 years, the trade has collectively added a powerful Rs 30 lakh crore to its AUM.
Year-on-Year AUM Growth
As per the info, the AUM of the mutual fund trade rose to an all-time excessive of Rs 68 lakh crore in 2024 (until November-end) from Rs 50.78 lakh crore on the finish of December 2023. This yr’s tally doesn’t embrace December quantity which can come out within the first week of 2025.
The asset base stood at round Rs 40 lakh crore on the finish of December 2022, Rs 37.72 lakh crore on the finish of December 2021 and Rs 31 lakh crore in December 2020.
The twelfth Consecutive Year of Growth
The 2024 additionally marked the twelfth consecutive yearly rise within the trade AUM after a drop in two previous years. This yr development within the trade was supported by inflows in fairness schemes, particularly Systematic Investment Plans (SIPs).
Over the final 4 years, the mutual fund trade has collectively added a powerful Rs 30 lakh crore to its AUM, displaying the sector’s constant upward trajectory.
“The rising development of financialisation has led to a major development in participation in fairness markets and mutual funds, as mirrored within the important development of AUM within the mutual fund trade,” stated Ganesh Mohan, CEO of Bajaj Finserv AMC.
“This shift is supported by the Indian economic system’s enlargement and growing monetary consciousness amongst retail buyers, who’re in search of greater returns at decrease prices and with better comfort,” he added.
Equity Schemes Drive Growth
The 45-player trade noticed a complete influx of Rs 9.14 lakh crore in 2024 (until November) as in comparison with an influx of over Rs 2.74 lakh crore final yr. The big influx may very well be on the again of sustained investor curiosity in fairness funds, arbitrage funds, and index funds & ETFs.
This yr’s flows included an funding of Rs 3.53 lakh crore in equity-oriented schemes, Rs 1.44 lakh crore in hybrid schemes, and round Rs 2.88 lakh crore in debt schemes.
Equity Market Contributions and SIPs
Equity schemes, which had been essentially the most enticing issue for buyers within the mutual fund area in 2024, schemes have been witnessing incessant internet influx on a month-to-month foundation since March 2021.
The contribution of fairness markets has additionally been key, with the Nifty 50 and BSE Sensex indices rising 8.5 per cent and eight per cent, respectively, in 2024.
SIP Contributions Surge
The internet inflows into equity-oriented schemes stood at Rs 3.53 lakh crore, pushed by sustained investor confidence and the structural shift towards long-term, disciplined investing via SIPs.
Monthly SIP contributions persistently surpassed the Rs 25,000-crore mark in October and November, signalling their rising attraction.
Investment Trends and Thematic Funds
“Investment via SIP into fairness funds has change into the default nature of investing for predominant Indian buyers on again of structural shift in financial savings sample, and fairness markets persevering with on the decadal development trajectory is a longtime development in India,” Akhil Chaturvedi, ED & CBO, Motilal Oswal AMC, stated.
Growth in Sectoral and Thematic Funds
Notably, sectoral and thematic funds emerged as main sights, with their AUM rising 79 per cent to Rs 4.61 lakh crore in 2024 from Rs 2.58 lakh crore in December 2023. These funds benefited from heightened retail curiosity, supported by Rs 1.4 lakh crore in inflows, together with Rs 67,000 crore raised via 40 new fund choices (NFOs), Morningstar’s Belapurkar stated.
Debt Funds and Institutional Investors
On the debt aspect, classes like liquid, ultra-short, and low-duration funds noticed sturdy inflows, pushed primarily by institutional buyers in search of short-term liquidity. Meanwhile, retail buyers confirmed renewed curiosity in gilt and dynamic length funds, anticipating potential charge cuts in early 2025.
Gold Investment Trends
Gold investments additionally gained traction, with inflows of Rs 9,500 crore as buyers sought security amid financial uncertainties, geopolitical tensions, and adjustments in taxation norms.
Gold’s Role in Portfolio Diversification
Aashish Somaiyaa, CEO of WhiteOak Capital AMC, famous that gold’s attraction as a portfolio hedge has been additional boosted by its integration into multi-asset allocation funds.
“At the identical time given there was uncertainty of US financial coverage, time to time USD weak point and geopolitical fault traces being uncovered, gold is at all times a protected haven to have in shopper portfolios,” he added.
Taxation Changes on Gold ETFs
Starting April 2025, Gold ETFs will likely be taxed as per investor’s tax slab for a holding interval of lower than 1 yr and at 12.5 per cent for a holding interval of greater than 1 yr, bringing them on par with taxation for fairness, Vishal Jain, CEO, Zerodha Fund House, stated.
Regulatory Support for Growth
Adding to the trade’s vibrancy, the regulatory setting performed a key position.
Sebi has launched measures to spice up mutual fund penetration and oversight. The MF Lite framework simplifies establishing asset administration firms, encouraging new gamers in passive funds. The new ‘Specified Investment Funds’ asset class allows boutique merchandise to achieve extra buyers with a decreased minimal ticket measurement of Rs 10 lakh, in comparison with Rs 50 lakh for PMS and Rs 1 crore for AIFs.
