The equity asset under management (AUM) for domestic mutual funds (MFs), reached new heights of Rs 14.4 trillion, up 41 per cent year-on-year in FY 21. 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 of equity-oriented domestic mutual funds was led by a rise in market indices like Nifty, which was up 19 per cent y-o-y, and as a result of an increase in equity scheme sales by 98 per cent at Rs 4,557 crore.
“The Nifty ended FY22 with gains of 19 per cent y-o-y, marking another year of strong returns despite the multitude of challenges (lockdowns announced due to the second COVID wave, rate hikes by the US Fed, withdrawal of excess global liquidity, the Russia-Ukraine War, the relentless rise in commodity prices, disruption in 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, and inflation and other data, and continued to invest in mutual funds via the systematic investment plan (SIP) route. The total SIP figure for the month of March 2022 reached a fresh high of Rs 12,330 crore, and it was up 7.8 per cent on a monthly basis and 34.3 per cent on an annual basis.
Fund Flow Trend
Redemptions in mutual funds declined marginally by 2 per cent on an annual basis to Rs 25.89 trillion. Net inflows after adjusting for redemption came in at an all time high of Rs 19.88 trillion.
The entire mutual fund industry’s total AUM increased by 20 per cent annually to Rs 37.6 trillion in the financial year 2022.
In the financial year 2022, inflows in 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 funds 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 equity, ELSS, and index schemes, and a total redemption of Rs 25.89 trillion.