India's mutual fund industry continues to exhibit robust growth, with the assets under management (AUM) of open-ended funds reaching a staggering ₹46,29,982 crore as of September 2023. This marks a significant 5% increase from the preceding quarter and an impressive 21% rise compared to the same period last year, reflecting the growing investor confidence in the sector, according to AMFI data analysed by Morningstar India’s quarterly report.
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Fund houses have seen a spike in inflows in the second quarter of the year, but some big fund houses have also experienced significant outflows. ICICI Prudential, Kotak Mutual Fund, Nippon MF, Quant MF, and Mirae Asset Mutual Fund saw the highest net inflows in the second quarter of FY 2023-24.
In contrast, Aditya Birla Sun Life, Axis MF, and UTI MF were among the fund houses that observed the highest outflows in the same period, with ABSL MF experiencing total outflows of ₹13,755 crore. Many schemes from these fund houses have seen substantial outflows in the last year.
In the latest quarter, open-end mutual funds witnessed net inflows of ₹34,765 crore. Although substantial, these inflows are notably lower than the ₹1,84,789 crore recorded in the quarter that ended in June 2023, indicating a shift in investment patterns amidst evolving market conditions.
The industry's composition reveals a well-diversified portfolio. Equity funds remain a major component, constituting about 41% of the total AUM. Fixed-income funds follow closely, accounting for 28%, demonstrating a balanced approach by investors towards risk and return. Other categories, including allocation/hybrid, solution, and miscellaneous funds, collectively make up the remaining 31%, underlining the varied preferences of investors.
The equity segment, particularly, has shown remarkable growth. Open-end equity funds registered a net inflow of ₹41,962 crore in the second quarter of fiscal 2023-24. Their total AUM as of September 2023 stood at an impressive ₹19,08,088 crore, up by 9% since June 2023 and a significant 30% increase over the same period last year.
Conversely, open-end fixed-income funds experienced net outflows amounting to ₹65,944 crore in the second quarter of fiscal 2023-24. Despite this, their AUM stood at ₹13,05,212 crore as of September 2023, marking a slight 3% decrease from the last quarter but still up by 5% year-on-year.
An interesting trend has emerged in the "Other Schemes" category, which includes a variety of subcategories like ETFs, index funds, and funds of funds overseas. This category has gained significant traction, witnessing net inflows worth ₹10,115 crore in the second quarter of fiscal 2023-24.
Additionally, the period saw the launch of 48 new fund offerings (NFOs), collectively garnering an impressive ₹22,049 crore during their NFO period. This underscores the growing appetite for novel investment opportunities among Indian investors.
(Edited by : Anand Singha)
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