The Rise of Mutual Fund
The soaring equity market has a rub off impact on mutual fund industry. This is what many of us believe. The reason for such belief is continuous net outflow of funds from equity dedicated funds that we saw between July 2020 and February 2021. Nonetheless, a latest month inflow of funds towards equity dedicated fund depicts entirely a different picture about mutual fund industry.
The monthly data released by industry body, Association of Mutual Funds in India (AMFI), for the month of December 2021 was very encouraging from equity mutual fund perspective.
According to the monthly data from AMFI, inflows of equity mutual funds has more than doubled to Rs 25,077 crore in December 2021 compared to Rs 11,615 crore that we witnessed in the month of November 2021 and against an outflow of Rs 10,147 crore in same month last year. Net inflows registered in December 2021 in equity MF is the highest since April 2018.
Even investment through SIP route in the month of December 2021 has come at Rs 11305 crore, which seems to be highest ever figure.
Considerable inflows surprised positively, and underlying quality and granularity have improved too, with robust SIP flows, up month on month in Apr-Dec 21, averaging nine per cent of annualised equity assets under management (AUMs). SIP ticket sizes have gradually declined from Rs 2900 thousand per SIP account in FY19 to Rs 2000 now, implying improved SIP flow granularity. Apart from healthy inflows, strong market returns of 22 per cent have also aided 36 per cent growth in equity AUMs.
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