HYDERABAD: Mutual fund houses are upbeat that retail investors will continue investing in markets through SIPs and other products in 2020. Interestingly, the industry saw assets under management (AUM) at an all-time high of Rs28,18,814 crore driven by positive flows in all categories of open-ended schemes, said N S Venkatesh, CEO, Association of Mutual Funds in India (AMFI). According to latest data from AMFI, the overall AUMs rose by 5 per cent at Rs27,85,804 crore in January as against
Rs26,54,075 crore in December, However, the average net assets under management (AAUM) grew at a modest 3.41 per cent. The Systematic Investment Plans (SIPs) saw total collections of Rs8,531.90 crore as against Rs8,518.47 crore the previous month. The SIP accounts as on January stood at 3.03 crore, whereas the SIP AUM was Rs3,24,868.34 crore. “This is a thumping recognition of retail investor acceptance of mutual funds, as a long-term wealth creation avenue, amid market volatility. We expect this positive growth momentum in MF AUMs to continue, driven by growth-oriented budget and RBI stance on continuing benign interest rate cycle, thus resulting in 15 to 20 per cent growth for the industry this fiscal,” said Venkatesh. Net inflows into income and debt-oriented schemes surged in January to over Rs1 lakh crore as against Rs78,000 crore in December, AMFI data shows. Inflows into open-ended growth and equity-oriented schemes surged over 75 per cent at Rs7,877 crore in January compared to Rs4,499 crore in December. Similarly, equity-linked saving schemes shot up 94 per cent last month.
“The equity AUM for the sector has grown from Rs7,62,798 crore in December 2019 to Rs7,87,557 crore in January 2020. This is on the back of strong equity inflows of Rs7,877 crore during the month, which has continued to increase for the second month in a row. While the small-cap funds have not been the flavour during the last few months, the recent rally seems to have driven the inflows into small and mid-cap fund inflows,” said Sundeep Sikka, ED & CEO, Nippon Life India Asset Management. Following the Budget announcements and subsequent RBI policy measures, fund houses expect retail investors to continue investing in the markets.
“We expect flows into mutual funds to gather further momentum in the coming months. On the fixed-income side, one of the noticeable trends is a shift away from liquid funds towards overnight funds. With the introduction of exit load in liquid funds and certain additional restrictions that will come into effect from April, we expect the trend to continue,” said G Pradeep Kumar, CEO, Union Asset Management Company.
With overall sentiments improving on the back of softer crude oil prices and lower interest rates as also unconventional steps taken by the RBI recently has led to expectations of further softening of interest rates. These factors should help to sustain the growth in equity markets in the near term. The industry has seen an 84 per cent increase in net flows between January 2019 and January 2020. As far as equity funds are concerned, there’s a 23 per cent increase in net inflows in last month over the last 12 months. “One remarkable thing is a 70 per cent increase in net flows in equities as against the previous month. It’s interesting to note this flow is well spread between the category of funds such as large-cap, mid-cap and multi-cap,” Kumar noted.
Assets under Aum at an all-time high
5% rise recorded in overall assets under management in Jan 2020
3.41% moderate growth of average net assets under management
AFMI data states that the AUMs rose to Rs 27,85,804 crore in January as against Rs 26,54,075 crore in December, 2019