Mutual Fund AUM To See 15% to 20% Growth This Fiscal

The income and debt-oriented schemes witnessed an increase in inflows in the month of January, as per the data released by the Association of Mutual Funds in India (AMFI) on February 10, 2020. The net inflows from income and debt-oriented schemes stood at Rs 1,09,305.61 crore for February 2020 as compared to outflow of Rs 78,426.82 crore for December 2019. “On the fixed-income side, one of the noticeable trends is a shift away from liquid funds toward overnight funds.  With the introduction of exit load in liquid funds and certain additional restrictions that will come into effect from April 1, 2020 we expect this trend to continue. With overall sentiments improving on the back of softer crude oil prices and lower interest rates as also unconventional steps taken by the RBI has led to expectations of further softening of interest rates,” said G Pradeepkumar CEO Union Asset Management Company

When it comes to the open-ended growth and equity-oriented schemes, it witnessed an inflow of Rs 7877.39 crore in January 2020 as compared to Rs 4,499.39 crore in December 2019, up by 75 per cent. Further the Equity-Linked Saving Schemes (ELSS) saw a growth of 94 per cent in January 2020. "The equity AUM for the sector has grown from Rs 7,62,798.57 crore in December 2019 to Rs 7,87,557.61 crore in January 2020. This is on the back of strong equity inflows of Rs 7,877 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 market rally seems to have driven the inflows into small and midcap fund inflows," said Sundeep Sikka, ED and CEO, Nippon Life India Asset Management.

The overall Asset Under Management (AUM) stood at Rs 27,85,803.67 crore in January 2020 as compared to Rs 26,54,074.76 crore in December 2019, up by 5 per cent. Similarly, the Average Net Assets Under Management (AAUM) for January saw a growth of 3.41 per cent. Commenting on the January 2020 monthly Mutual Fund data, N S Venkatesh, CEO, AMFI said, "Mutual fund industry saw AAUMs at an all-time high at Rs 28,18,813.77 crore driven by positive flows in all categories of open-ended schemes.”

That said the total amount collected through Systematic Investment Plans (SIPs) during January 2020 came at Rs 8,531.90 crore as compared to December 2019, which stood at Rs 8,518.47 crore.  The SIP accounts as on January 2020, stood at 3.03 crore, whereas the SIP AUM was Rs 3,24,868.34 crore. “This is a thumping recognition of the 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.