Equity assets under management (AUM) for domestic mutual funds (MFs) hit new highs of Rs 14.4 trillion, up 41% year on year in FY21. This also includes equity-linked savings schemes (ELSS) and index funds, according to a report by brokerage firm Motilal Oswal Financial Services (MOFSL).
This impressive growth in domestic equity-focused mutual funds was led by a rise in equity indices like Nifty, which rose 19% year-on-year, and following an increase in equity program sales. by 98% to Rs 4,557 crore.
“The Nifty ended FY22 with 19% year-on-year gains, marking another year of strong returns despite the myriad of challenges (announced lockdowns due to the second wave of COVID, rate hikes by the US Fed , withdrawal of excess global liquidity, Russia- Ukraine war, relentless rise in commodity prices, disruption of supply chains and weak rural demand),” the report said.
The retail trend
The report also noted that retail investors defied the challenges posed by geopolitical tensions, inflation and other data, and continued to invest in mutual funds via the systematic investment plan route ( SIP). The total SIP figure for the month of March 2022 reached a new high of Rs 12,330 crore, and it increased by 7.8% on a monthly basis and 34.3% on an annual basis.
Fund flow trend
Redemptions in mutual funds fell slightly by 2% on an annual basis to reach 25.89 trillion rupees. Net inflows after adjustment for redemption hit a record high of Rs 19.88 trillion.
The total assets under management of the entire mutual fund industry grew by 20% annually to reach Rs 37.6 trillion in the financial year 2022.
In the financial year 2022, inflows of equity-oriented funds stood at Rs 1.988 trillion, exchange-traded funds (ETFs) at Rs 80,080 crore, balanced funds at Rs 72,500 crore, arbitrage at 22,800 crore, liquid funds at Rs. 16,400 crore, fund of funds at Rs. 10,700 crore and gold ETFs at Rs. 2,500 crore.
For the financial year 2022, there were gross sales of Rs 45.77 trillion in equities, ELSS and index programs, and total redemption of Rs 25.89 trillion.