Mutual fund assets spike 40% in a year on equity-oriented schemes, higher retail participation: AMFI data

The assets managed by the mutual fund industry in the country rose by 40.70 per cent in the past one year, rising from ₹46.94 lakh crore in August 2023 to ₹66.04 lakh crore in August this year, the data released by the Association of Mutual Funds in India (AMFI) revealed.

This jump is noteworthy because it is attributable to an increase in retail investors' investment, particularly in equity schemes.

Sample this: the value of assets held by individual investors in mutual funds rose from ₹27.15 lakh crore in August 2023 to ₹40.36 lakh crore in August 2024, a whopping 48.67 per cent increase.

Also, the proportionate share of equity-oriented schemes touched 60.1 per cent of the industry assets in August 2024, vis-à-vis 52.7 per cent in August 2023, according to the Industry Trends data for August 2024.

Debt schemes

Conversely, the proportionate share of debt-oriented schemes in industry assets was 14.5 per cent in August 2024, significantly lower than 19.2 per cent a year ago. At the same time, ETF market share was 12.7 per cent in August 2024, the same as in August 2023.

Interestingly, equity-oriented schemes derive 88 per cent of their assets from individual investors, whereas debt schemes derive 37 per cent from individual investors.

Meanwhile, institutional investors are dominant in liquid and money market schemes (88 per cent), debt schemes (63 per cent) and ETFs & FOFOs (89 per cent). The value of institutional assets rose from ₹19.79 lakh crore in August 2023 to ₹25.68 lakh crore in August 2024, a jump of 29.77 per cent.

Additionally, individual investors primarily hold equity-oriented schemes, whereas institutions hold liquid, debt-oriented schemes and ETFs & fund of funds.

Around 87 per cent of individual investor assets are held in equity schemes while 52 per cent of institutional assets are held in liquid or money market schemes and debt schemes.

SIP contribution

The jump in mutual fund assets is also attributable to the increase in SIP contributions. The number of SIP accounts stood at its highest ever, at 9,61,36,329 in August 2024 as compared to 9,33,96,174 in July 2024.

The SIP asset under management (AUM) was highest ever at ₹13,38,944.73 crore in August 2024, as compared to ₹13,09,385.46 crore in July 2024. The SIP contribution stood at an all-time high of ₹23,547 crores in August 2024 compared to ₹23,331.75 crore in July 2024.

Sridharan Sundaram, a Sebi-registered investment advisor and Founder of Wealth Ladder Direct, says that there are two key reasons for this surge in the mutual fund assets in the past one year.

“One reason is that small and mid caps jumped anywhere between 30 to 40 percent in the past one year, and the second is the continuous inflow into mutual funds via SIPs to the tune of around ₹20,000 crore every month,” says Sundaram.