The Indian mutual fund industry has experienced significant growth in 2024, largely driven by a sustained increase in equity markets that has attracted numerous retail investors. This trend has solidified mutual funds as a preferred choice for wealth creation and long-term financial planning.
In November 2024, the industry’s Assets Under Management (AUM) surpassed ₹68 lakh crore, reaching ₹68.08 lakh crore—a notable 34% increase from ₹50.78 lakh crore in December 2023. Projections indicate that total AUM will exceed ₹69 lakh crore by the end of the year, supported by anticipated inflows
of around ₹1 lakh crore in December. This growth in AUM is primarily attributed to consistent investments in equity schemes, which accounted for ₹30.5 lakh crore, or 45% of total assets. This is a stark contrast to a decade ago when equity mutual fund AUM was merely ₹1.9 lakh crore.
Despite some slowdown in inflows due to market volatility, November marked the 45th consecutive month of net inflows into equity-oriented funds, underscoring the increasing popularity of mutual funds among investors.
Sectoral and Thematic Funds Lead Retail Interest
Among various equity mutual fund categories, sectoral and thematic funds have garnered substantial retail interest, with their AUM rising by 79% in 2024 to ₹4.61 lakh crore from ₹2.58 lakh crore at the end of 2023. Small-cap mutual funds also gained traction, with AUM increasing to ₹3.26 lakh crore from ₹2.33 lakh crore, while mid-cap funds surged from ₹2.81 lakh crore to ₹3.89 lakh crore.
The AUM for large-cap funds stood at ₹3.62 lakh crore in 2024, and other schemes—including index funds and ETFs—witnessed a 28% increase, rising from ₹8.83 lakh crore in January to ₹11.29 lakh crore by November.
Over the past decade, the AUM of the Indian mutual fund industry has grown more than sixfold, surpassing significant milestones: crossing ₹10 lakh crore in May 2014 and exceeding ₹30 lakh crore by November 2020.
As of November 30, 2024, the total number of mutual fund folios reached 22.08 crore, with approximately 17.55 crore folios under equity, hybrid, and solution-oriented schemes dominated by retail investors.
SIP Inflows Surge
Systematic Investment Plans (SIPs) have also gained momentum in 2024, with SIP AUM reaching a record ₹13.54 lakh crore in November. The number of SIP accounts hit an all-time high at over 10.22 crore, reflecting a 48% increase in monthly SIP inflows from ₹17,073 crore in November 2023 to ₹25,320 crore in November 2024.
Market Resilience Amid Volatility
Despite recent market dips due to foreign portfolio investor (FPI) outflows, domestic institutional investors have stepped up to stabilize the market. This trend highlights the resilience of the Indian stock market amid global uncertainties.
Experts remain optimistic about the long-term growth potential of the Indian economy and recommend that retail investors focus on equity mutual funds as a reliable avenue for wealth creation despite short-term volatility.
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