Kolkata: The calendar year of 2024 has so far brought almost unalloyed cheer in the mutual fund industry. The sheer weight of figures as reported in the media made it quite evident. When FIIs took out almost Rs 90,000 crore in October alone, analysts were on tenterhooks. But the behaviour of the mutual fund investors and the recovery in the last month of the year has made a silver living prominent in the investment firmament.
The AUM of open-ended mutual funds went up by 29% this year between January and November. Needless to say, the bull run in the market handed over the lead to the equity-linked mutual funds.
The SIP revolution
The SIP revolution not only broadened the mutual fund markets but also deepened it. Individual investors are committing more and more funds in SIP, while there is a nearly three-fold jump in the figure of mutual fund folios. While the total folios in the country stood at 7.92 crore in January 2024, it ballooned to 22.08 crore in November 2024, revealed AMFI data.
“To my mind, the biggest highlight of the mutual fund industry in 2024 has been the phenomenal rise in the volumes of SIP. Steadily rising every month, the amount has now exceeded Rs 25,000 crore a month. It means a steady flow of at least Rs 1.5 lakh crore a year as a long-term fund even if we assume a 50% shaving off due to corrections,” investment strategist Prasunjit Mukherjee who is also the CEO, Plexus Management Services told News9live.
The rise of passive/index funds
A bewildering variety of passive funds has hit the market in 2024. Nilanjan Dey, director, Wishlist Capital is never tired of highlighting this aspect of the mutual fund canvas. “Not only is the passive funds segment growing, but also there is a welcome development of newer and newer indices being constructed. I know of firms that specialise in constructing indices,” he said. According to Dey, the passive/index funds will gradually grow in the country. “As a result, the greatest-every variety of funds are laid before the Indian investor now. Never did he have such an array of funds. Apart from passive funds, there are ETFs too,” Dey added, saying the expansion of the product basket that has taken place in 2024 is quite unprecedented.
Concurred Mukherjee of Plexus. “A lot of passive funds with a variety of themes have hit the market this year. The market has diversified a lot into index/passive funds, evolving a lot from the Nifty 100, Nifty index funds. There are 3 kinds of passive funds available just on the momentum category. There has been significant spurt in index-related themes in large, mid and small cap segments,” added Mukherjee. He also pointed out that the investing public is substantially understanding the themes, which indicates growing maturity of the people.
Year when investors became mature
Mukherjee, who has been in investment consultancy for 3 decades, says that 2024 has witnessed an overall maturity among the investors. “They are keeping the money in the market. FIIs have taken out Rs 1.30 trillion in 3 months. But the market has turned back after dipping initially,” remarked Mukherjee.
One of the disappointments as pointed out by investment managers is the constraint in global diversification. “Our global exposure is now limited. Even if we want, we cannot invest in Australia, Brazil, Indonesia or China if we want to take advantage of the mineral and metal cycle,” the Plexus CEO said.
The sheer SIP (Systematic Investment Plan) volumes, new passive funds with a bewildering array of themes and fast maturing investor behaviour have been the highlights of the mutual fund industry in 2024. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
