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Investors have pumped Rs1.4 trillion into mutual funds in April, driving the industry asset base to a staggering Rs23.25 trillion, a surge of 9% from the preceding month.

In comparison, assets under management (AUM) of the mutual fund industry, comprising 42 players, were at Rs21.36 trillion in March-end, according to the latest update with Association of Mutual Fund in India (Amfi).

Industry experts attributed the surge in AUM to ‘aggressive’ investor awareness campaign both at the individual as well as at industry level. In addition, they added, investors are moving towards financial asset class for investment instead of buying traditional asset classes such as real estate and gold, which also helped in increasing the penetration of mutual funds.

Moreover, systematic investment plan (SIP) has also given the investors a choice as well as flexibility of investing periodically or in lump sum as per their preference, said COO Harsh Jain at Groww, an online platform which sells financial products including mutual funds.

Overall, investors have poured in a net Rs1.4 trillion in mutual fund schemes last month as compared to redemptions of Rs50,752 crore in March due to new tax on long-term equity gains.

The latest inflow has been mainly driven by contributions from liquid or money market category and equity funds. The liquid funds or money market category—with investments in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon—witnessed an infusion of over Rs1.16 trillion.

Besides, equity and equity-linked saving schemes saw an inflow of more than Rs11,000 crore. Further, income funds which invest in a combination of government securities witnessed an infusion of Rs5,220 crore.

In contrast, a net sum of Rs436 crore and Rs54 crore being pulled out from gilt and gold exchange traded fund (ETF), respectively.

Mutual funds are investment vehicles made up of a pool of funds collected from a large number of investors. The funds are invested in stocks, bonds and money market instruments, among others.

Last modified on Tuesday, 08 May 2018

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