In December 2023, the assets under management (AUM) of the mutual fund industry crossed Rs 50 lakh crore for the first time.
In March 2024, it stood at Rs 53.40 lakh crore. And in the three subsequent months of April, May and June it quickly rose to Rs 57.26 lakh crore, Rs 58.91 lakh crore and Rs 61.16 lakh crore respectively. This translates into a growth of more than 22% in the period between December 2023 and June 2024!!!
If you think this phenomenal growth is attributable only to the rise of the stock markets, think again. A huge amount of money is being funnelled by the families of the country from the banks to mutual fund schemes.
Rising mutual fund folios
This is also evident from the rising number of mutual fund folios in India. It stood at 19.1 crore in June 2024 – a 7.36% jump from 17.76 crore from March 2024 and a 12.61% rise compared to January 2024.
The amount of money flowing every month into mutual fund SIPs (Systematic Investment Plan) has been rising every month since June 2023. It has risen to 21,262 crore in June 2024. It means every day investors put in Rs 966 crore in June, assuming there are 22 trading days in the last month.
The lure of capital markets
“Households and consumers who traditionally leaned on banks for parking or investing their savings are increasingly turning to the capital markets and other financial intermediaries,” Shaktikanta Das said in an event on July 19.
The RBI governor added that more and more families are putting their savings in mutual funds, insurance funds, and pension funds.
Mission: Beat inflation
The movement away from traditional guaranteed-return instruments in banks basically began the quest of the middle class for inflation-beating investment avenues.
“Over the past four years, there has been a marked change in the mood of the average Indian household. People are not only becoming aware of the need to stay ahead of the inflation curve but are actively seeking out instruments to create wealth,” said Nilanjan Day, director, Wishlist Capital and an investment strategist for two decades.
“Even those who are retiring now are not averse to trying out market-linked instruments such as mutual funds for capital appreciation. Their main concerns are beating healthcare inflation and rising costs of essential commodities and services. Retirees have traditionally put security of capital above everything else. But there are signs of change,” added Dey.
The mutual fund industry is growing at a furious pace, so much so that families are channeling their savings from banks into these instruments. None other than the RBI Governor Shaktikanta Das has admitted this trend. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
