 "Inflows into equity mutual funds (MFs) continued their strong momentum in July, despite the market volatility triggered by the Union Budget. Active MF schemes received Rs 37,113 crore, the second-highest monthly inflows ever, after attracting a recor")
Illustration: Binay Sinha
The mutual fund (MF) investor base is poised to surpass the 50-million unique investor milestone in September, with net additions exceeding 10 million in just 12 months amid sustained buoyancy in the equity market and a rush of new fund offerings (NFOs).
The previous 10-million additions took the industry 21 months, while the move from 20 million to 40 million took over 26 months.
The unique investor count is mapped by the number of PANs registered with MF schemes.
According to MF officials, the surge in the pace of investor additions is underpinned by the growing appeal of equity investing.
“Today, investors are looking towards market-linked investments like mutual funds to participate in the growth of our country, where there are pockets of opportunities across the economy and sectors,” said D P Singh, deputy managing director and joint chief executive officer, SBI MF.
“As the long-term conviction in the India story deepens into the country and demography, we are set to see the actual uptake of investor flow into the capital markets. We will see both mutual funds and demat accounts growing simultaneously,” added Swarup Anand Mohanty, vice-chairman and chief executive officer, Mirae Asset Investment Managers.
The two industry leaders said the growing traction for equities and systematic investment plan (SIP) investing is likely to double the investor count to 100 million in the next 3–4 years. The industry has set a target of 100 million investors by 2030 as it looks to take the total assets under management (AUM) past the Rs 100-trillion mark.
While retail interest in equities has been growing steadily post the Covid-19 pandemic, the recent uptick in investor additions has been fuelled by the strong market rally, robust performance of equity schemes, and a rush of NFOs in popular categories, say experts.
The benchmark indices Nifty 50 and Sensex are up around 30 per cent in the last one year. Fund houses have launched back-to-back equity NFOs during the period. The launches have been especially higher in the past four months, coinciding with a surge in investor additions. In the May-August period, MFs launched 21 active equity schemes, collectively raising Rs 48,735 crore.
Groww, the largest direct plan distributor, said its SIP investor base has tripled in the last two years, both in metro and non-metro locations.
“Top states with the maximum growth were Maharashtra, Uttar Pradesh, West Bengal, Bihar, Karnataka, and Delhi,” it said, adding that around 80 per cent of investments on the platform come from beyond the top six cities.
Singh said the growing investor count can be attributed to other factors as well. “There have been several levers for this growth—the overall positive economic sentiment, tech enablers in BFSI, and awareness campaigns by the industry,” he said.
First Published: Sep 23 2024 | 7:40 PM IST
