Mutual Fund Growth: The craze of mutual funds in India is growing rapidly. In the last 10 years, the mutual fund industry has increased more than 6 times. Its assets under management (AUM) reached 67 lakh crores in December 2024. According to Motilal Oswal Asset Management Company’s ‘Whore the Money Flow’ report, equity funds dominated the growth, which is 60.19% of the total AUM. In the December quarter, mutual funds received a net inflow of 198 thousand crores, with active equity and Flexi Cap Funds. However, investors’ interest in themetic and international funds declined.
Mutual fund industry increased 6 times in 10 years
According to the ‘Whore the Money Flow’ report of Motilal Oswal Asset Management Company (Moomc), India’s asset management industry has registered a great increase of more than 6 times in the last 10 years. In December 2014, where its assets under management (AUM) was Rs 10.51 lakh crore, it has increased to Rs 66.93 lakh crore by December 2024.
The report states that the largest share in the total assets under management (AUM) is of equity funds with 60.19%. This is followed by 26.77% in date funds, 8.58% in hybrid funds and 4.45% in other investment options. It is clear from these figures that the first choice of investors still remain equity funds.
Investors are putting more bets on these schemes
In the December quarter, the Mutual Fund Industry recorded a net investment of Rs 198 thousand crore, which contributed the most to equity funds, especially in the active segment. 84 new schemes were launched in this quarter, from which about 24.8 thousand crore rupees were raised. Investors placed bets on these schemes…
Equity fund dominated
The mutual fund industry recorded a net inflow of about 199 thousand crore rupees in the December quarter. The total contribution of equity and date funds in this was 67% and 19% respectively. Active Equity Funds led a net inflow of about Rs 105 thousand crore, while the passive equity funds made an investment of Rs 29 thousand crore.
On one hand, investors in active date funds invested about 47 thousand crores. On the other hand, he took out about 9 thousand crore rupees from the passive date funds.
Investors give priority to broad based fund
Broad -based funds captured about 69% market share and mostly equity net inflow. The stake of active broad based funds increased from 57% to 70% on a quarterly basis, while passive broad -based funds decreased from 90% to 66%.
In active equity, the net inflow of thematic funds declined compared to the previous quarter and came to Rs 14,000 crore.
In passive equity, the fall in the inflow of broad based funds was compensated by the increased net inflow in the factor and sector funds. In this quarter, Factor Funds won 22% of total net inflow and sector funds 10%.
Flexi cap edge in broad-based segment
Investors preferred active flexi cap and mid -cap funds, with each receiving a net inflow of about Rs 15,000 crore. Investors chose mainly passive funds for their allocation in large cap, which recorded about 84% net inflow in this category. However, it saw a slight decline, as the investment trend shifted to the mid -cap and small cap segment.
Themetic Segment: Consumption and Infrastructure Investors’ first choice
Overall, the net inflow in thematic mutual funds decreased from Rs 17 thousand crore to Rs 14 thousand crore. The highest investment in this segment was in consumption and infrastructure, which recorded a net inflow of Rs 4.5 thousand crore.
Passive themetic funds saw a new theme such as capital markets, electric vehicles (EV) and tourism.
Constant maturity funds dominate, big outflow in target maturity funds
Constant Maturity Funds contributed about Rs 37 thousand crore to the total net flow and dominated the inflow. After this, corporate bond funds received a net flow of about 6 thousand crores and gilt funds got a net flow of about 4 thousand crores. At the same time, the target maturity funds recorded a net out flow of about 8 thousand crores.
Strong inflow in liquid funds, money market funds decreased
Overall, liquid funds contributed to about 41% net flow, which remained around Rs 15,000 crore. After this, Low Duration and Ultra Short Duration category received an inflow of Rs 7.5 thousand crore and Rs 7 thousand crore respectively.
Typically, investors use date funds up to 1 year maturity to park additional cash in short term, leading to inflow and outflow fluctuations. Net inflow of money market funds decreased from 27% to 9% on a quarterly basis (QOQ).
Multi asset funds made in hybrid category
Multi Asset Funds led the hybrid category and acquired 48% of the total net inflow. After this, Balanced Advantage Funds contributed 25%.
Net Inflow of Equity Savings Funds declined from 26% to 15% on a quarterly basis (QOQ), while the stake of Agressive Hybrid Funds increased from 4% to 12%.
Investors’ interest in international funds is reduced
Investment in international funds was quite low, as RBI has bounds on new investment in these schemes. A net inflow of 0.1 thousand crore rupees was recorded in both active and passive broad-based funds. At the same time, investors withdrew 0.3 thousand crores from passive themetic international funds.
Mutual funds capable of meeting various needs of investors
Motilal Oswal AMC’s MD and CEO Prateek Aggarwal said, “India’s mutual fund industry has grown rapidly, whose assets under management (AUM) is now about Rs 67 lakh crore. This growth is the result of the country’s economic progress and increasing financial literacy.
This growth shows that the mutual fund industry is fully capable of fulfilling various needs of investors as well as strengthening the country’s financial ecosystem. Innovation, technology and adapted investment solutions will play an important role to maintain this development in future.