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Monthly SIP payments constantly went beyond the Rs 25,000-crore mark in October and November, signalling their expanding allure
Mutual Fund Growth In 2024: The year additionally noted the 12th successive annual increase in the market AUM after a decrease in 2 coming before years.
Mutual Fund Growth In 2024: After an excellent 2023, the common fund market maintained its development energy in 2024 with an excellent Rs 17 lakh crore rise in properties, driven by resilient equity markets, durable financial development, and enhancing capitalist engagement. Experts are anticipating the favorable fad will certainly expand right into 2025.
Substantial Inflows and SIP Growth
The year 2024 saw a significant internet inflow of Rs 9.14 lakh crore, along with a substantial 5.6 crore boost in capitalist matter and an expanding appeal of SIPs, which alone added Rs 2.4 lakh crore, according to information from the Association of Mutual Fund Industry (Amfi), as reported by information firm PTI in an evaluation.
Continued Growth Expectations for 2025
Kaustubh Belapurkar, Director-Manager Research at Morningstar Investment Research India, claimed, “The common fund market’s properties are anticipated to proceed expanding at a healthy and balanced speed in 2025. With increasing infiltration amongst retail financiers, moves right into equity funds, specifically with Systematic Investment Plans (SIPs), are most likely to continue to be durable.”
AUM Reaches All-Time High
The inflows lifted the industry’s assets under management (AUM), reaching an all-time high of Rs 68 lakh crore by November-end, marking a 33 per cent growth over the Rs 50.78 lakh crore registered at the end of 2023.
Comparison with Previous Growth Trends
This growth was way higher than 27 per cent rise and Rs 11 lakh crore addition in AUM in 2023, as well as the more modest growth in previous years.
The industry saw a 7 per cent growth and Rs 2.65 lakh crore increase in AUM in 2022, as well as nearly 22 per cent growth and close to Rs 7 lakh crore addition to the asset base in 2021.
Consistent Upward Trajectory
Over the last four years, the industry has collectively added an impressive Rs 30 lakh crore to its AUM.
Year-on-Year AUM Growth
As per the data, the AUM of the mutual fund industry rose to an all-time high of Rs 68 lakh crore in 2024 (till November-end) from Rs 50.78 lakh crore at the end of December 2023. This year’s tally does not include December number which will come out in the first week of 2025.
The asset base stood at around Rs 40 lakh crore at the end of December 2022, Rs 37.72 lakh crore at the end of December 2021 and Rs 31 lakh crore in December 2020.
The 12th Consecutive Year of Growth
The 2024 also marked the 12th consecutive yearly rise in the industry AUM after a drop in two preceding years. This year growth in the industry was supported by inflows in equity schemes, especially Systematic Investment Plans (SIPs).
Over the last four years, the mutual fund industry has collectively added an impressive Rs 30 lakh crore to its AUM, showing the sector’s consistent upward trajectory.
“The growing trend of financialisation has led to a significant growth in participation in equity markets and mutual funds, as reflected in the significant growth of AUM in the mutual fund industry,” claimed Ganesh Mohan, CHIEF EXECUTIVE OFFICER of Bajaj Finserv AMC.
“This change is sustained by the Indian economic climate’s growth and enhancing economic recognition amongst retail financiers, that are looking for greater returns at reduced prices and with higher comfort,” he added.
Equity Schemes Drive Growth
The 45-player industry saw a total inflow of Rs 9.14 lakh crore in 2024 (till November) as compared to an inflow of over Rs 2.74 lakh crore last year. The huge inflow could be on the back of sustained investor interest in equity funds, arbitrage funds, and index funds & ETFs.
This year’s flows included an investment of Rs 3.53 lakh crore in equity-oriented schemes, Rs 1.44 lakh crore in hybrid schemes, and around Rs 2.88 lakh crore in debt schemes.
Equity Market Contributions and SIPs
Equity schemes, which were the most attractive factor for investors in the mutual fund space in 2024, schemes have been witnessing incessant net inflow on a monthly basis since March 2021.
The contribution of equity markets has also been key, with the Nifty 50 and BSE Sensex indices rising 8.5 per cent and 8 per cent, respectively, in 2024.
SIP Contributions Surge
The net inflows into equity-oriented schemes stood at Rs 3.53 lakh crore, driven by sustained investor confidence and the structural shift toward long-term, disciplined investing through SIPs.
Monthly SIP contributions consistently surpassed the Rs 25,000-crore mark in October and November, signalling their growing appeal.
Investment Trends and Thematic Funds
“Investment through SIP into equity funds has become the default nature of investing for predominant Indian investors on back of structural shift in savings pattern, and equity markets continuing on the decadal growth trajectory is an established trend in India,” Akhil Chaturvedi, ED & & CBO, Motilal Oswal AMC, claimed.
Growth in Sectoral and Thematic Funds
Notably, sectoral and thematic funds became significant tourist attractions, with their AUM expanding 79 percent to Rs 4.61 lakh crore in 2024 from Rs 2.58 lakh crore in December 2023. These funds gained from enhanced retail rate of interest, sustained by Rs 1.4 lakh crore in inflows, consisting of Rs 67,000 crore increased with 40 brand-new fund offerings (NFOs), Morningstar’s Belapurkar claimed.
Debt Funds and Institutional Investors
On the financial debt side, groups like fluid, ultra-short, and low-duration funds saw durable inflows, driven largely by institutional financiers looking for temporary liquidity. Meanwhile, retail financiers revealed restored rate of interest in gilt and vibrant period funds, expecting prospective price cuts in very early 2025.
Gold Investment Trends
Gold financial investments additionally got grip, with inflows of Rs 9,500 crore as financiers looked for security in the middle of financial unpredictabilities, geopolitical stress, and modifications in tax standards.
Gold’s Role in Portfolio Diversification
Aashish Somaiyaa, Chief Executive Officer of WhiteOak Capital AMC, kept in mind that gold’s allure as a profile bush has actually been better enhanced by its assimilation right into multi-asset allowance funds.
“At the exact same time offered there has actually been unpredictability people financial plan, time to time USD weak point and geopolitical geological fault being revealed, gold is constantly a safe house to have in customer profiles,” he added.
Taxation Changes on Gold ETFs
Starting April 2025, Gold ETFs will be taxed as per investor’s tax slab for a holding period of less than 1 year and at 12.5 per cent for a holding period of more than 1 year, bringing them on par with taxation for equity, Vishal Jain, CEO, Zerodha Fund House, said.
Regulatory Support for Growth
Adding to the industry’s vibrancy, the regulatory environment played a key role.
Sebi has actually presented procedures to improve common fund infiltration and oversight. The MF Lite structure streamlines establishing property administration firms, motivating brand-new gamers in easy funds. The brand-new ‘Specified Investment Funds’ property course makes it possible for shop items to get to even more financiers with a minimized minimum ticket dimension of Rs 10 lakh, contrasted to Rs 50 lakh for PMS and Rs 1 crore for AIFs.
