The Assets Under Management (AUM) of the mutual fund industry rose by 5.7% to a total of ₹39.88 lakh crore in 2022.
This was way lower than a surge of nearly 22% or an increase of close to ₹7 lakh crore in the asset base to ₹37.72 lakh crore in 2021.
According to the Association of Mutual Fund Industry (AMFI) data, the mutual fund industry added ₹2.2 lakh crore to its asset base in 2022, driven by consistent monthly increase in Systematic Investment Plan (SIP) flows.
Some experts believe that growth in the asset base in 2023 would be driven by economic growth and retail participation from young investors.
TS Ramakrishnan, managing director and CEO, said, “Though the mutual fund industry AUM grew by 5.7%, retail AUM grew by ~20%. The penetration of SIP has resulted in an increase in the retail participation. Through digital marketing, industry has been able to reach a wider audience base thus ensuring democratisation of mutual funds.”
Higher awareness about equities and their ability to create wealth over a longer term is what has led to this increase in flows in equity-oriented schemes in 2022.
“We believe that SIP numbers will continue to grow this year as well. There is a shift in the investors mindset to look at mutual funds as a long-term wealth creation tool thus will lead to rise in the industry AUM,” Ramakrishnan added.
“Maturing of the retail investor is the reason for the consistent inflow in equities. 2022 has been a volatile year. People have used opportunities of corrections to average down and continue to add money,” Radhika Gupta, MD and CEO of Edelweiss AMC.
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While, the growth of 42-player mutual fund space in 2021 was mainly braced by a rally in the stock markets. The increase in asset base in 2022 is mostly the result of advanced SIP flows, which touched ₹13,000 crore for the second time in a row in November.
Akhil Chaturvedi, CBO, Motilal Oswal Asset Management Company, said that equity funds saw a jump in net inflows to 7.3k crores in December from 2.2k crores in November. This was led by increased flows in mid and small cap categories which after the recent fall has started to look attractive in terms of valuations.
“We are also seeing highest inflows in our Midcap fund in line with the overall industry. SIPs continue to create new milestones with above 13k crores of inflows for the 3rd straight month. This highlights the strong domestic flows which has also helped to negate the recent selling by FIIs,” Chaturvedi said.
Moreover, the investor count is estimated to have expanded by 2 crore during 2022 to 14.11 crore. In 2021, a total of 2.6 crore folios were added.
Equity schemes have got inflow to the tune of ₹1.61 lakh crore last year as against ₹96,700 crore in 2021.
The schemes have been witnessing incessant net inflow since March 2021 and before this, the equity schemes had witnessed outflows for eight straight months on account of the Covid pandemic.
During the calendar year, SIP inflows averaged more than ₹12,500 crore per month, helping investors to stay in the stock market and benefit from Rupee cost averaging. The steady inflow suggests resilience in domestic inflows, which have been strong counterbalance to Foreign Portfolio Investors (FPIs) selling.
In 2022, the total net flows into all mutual funds stood at ₹71,443 crore, with positive inflows into equity schemes (₹1.61 lakh crore), index funds and ETFs (₹1.65 lakh crore) and negative inflows into debt schemes (₹2.5 lakh crore).
(With PTI inputs)
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