Mutual funds inflow soars 7% to ₹40.05 lakh crore in FY23 — industry data says

Mutual funds inflow in recently ended financial year 2022-23 grew near 7 per cent to ₹40.05 lakh crore against ₹37.70 lakh crore in the previous fiscal. As per the latest data released by mutual fund body Amfi, Indian equity mutual funds registered 31 per cent rise in inflow on sequential basis in March 2023.

The Amfi data informs that equity mutual funds witnessed positive inflows of nearly ₹20,534 crores, which is highest in last one year.

The Amfi data went on to add that mutual fund industry's net AUM (Assets Under Management) in March 2023 rose to ₹39,42,031 crore, while average AUM hit ₹40,04,638 crore, up from ₹37,56,682.57 crore and ₹37,70,295.79 crore, respectively, in March 2022. In this rise in mutual funds AUM, biggest contributor was SIPs (systematic investment plans), which rose to a record ₹14,276.06 crore in March, taking the overall AUM to ₹6,83,296.24 crore.

In the last fiscal, Sensex managed to rise just 0.72 per cent even though investors' wealth eroded by ₹5.86 lakh crore.

Of the total AUM, retail AUM across equity, hybrid and solution-oriented schemes stood at Rs  20,34,533 crore and the average AUM rose to ₹20,45,632 crore.

Speaking on the mutual fund industry's performance in recently ended month, N S Venkatesh, chief executive at Amfi chief executive said that the growing investors' base shows their continuing faith in the equity markets via the mutual funds route. While equity-oriented mutual funds registered a net inflow of over ₹2,00,000 crore in FY23, SIP inflows continued to soar, breaking the record on a month-on-month basis, Amfi chief executive added.

Venkatesh expressed confidence in inflows continuing in FY24 at a reasonable pace, saying there is no reason to believe that the growth momentum will not be maintained.

The number of SIP accounts stood at 6.36 crore as of March and the number of new SIPs registered were 21.65 lakh.

On a monthly basis, for the 25th month in a row, equity mutual fund inflows jumped to a 12-month high in March and net investments in equity and equity-linked schemes rose 31 per cent to ₹20,534.2 crore over the previous month.

Jean Christophe, Director and Chief Marketing Officer, Sharekhan by BNP Paribas said, “The mutual AUM in the month of Mar-23 stood at ₹39.42 lakhs crores a marginal fall from the previous month. The Indian equity indices seemed range bound in the month of Mar-23 with a marginal increase of 1%. Equity Mutual Funds witnessed positive inflows of nearly 20,534 crores which is a jump of nearly 31% from the previous month. Increasing inflows since the beginning of the year with this month being the highest contribution in the past ten months reflects investors’ confidence in the growth of the Indian economy. A major contributor to the positive inflows could be due to the maximum inflows witnessed in the ELSS category which can be attributed to the tax planning of the investors.”

G Pradeepkumar, chief executive at Union AMC, said net inflows reinforce the belief that domestic investors continue to have high level of confidence in mutual funds as an effective vehicle for wealth creation.

On reason for churn in mutual fund inflows, Ajaykumar Gupta, CBO at Trust Mutual Fund said, “Mutual Funds witnessed significant AUM churn in March 2023 on the back of changes in tax laws. While the Cash category saw outflow of around ₹65,000 crore, which is typically a year end phenomenon, the Arbitrage Funds and Funds with maturity of less than 1 year, saw outflows of near ₹12,000 and around ₹28,000 crore respectively.”

Trust Mutual Fund expert went on to add that a large portion of the above outflow channeled itself back into duration funds like Corporate Bond, Banking & PSU fund, Dynamic bond, Long duration and Gilt funds which saw inflows totaling around ₹39,000 crore.

(With inputs from PTI)