Mutual funds attract 6% of household savings in FY23, shows RBI data
- IBEF
- September 21, 2023
Household investments in mutual funds (MFs) reached a new high of Rs. 1.8 trillion (US$ 21.66 billion) during the fiscal year 2022-23, partly due to strong inflows via systematic investment plans (SIPs).
However, data from the Reserve Bank of India (RBI) shows that their share of all family savings decreased from 6.2% in FY22 to 6.1% in FY23. Despite the growing popularity of MFs, direct equity investments have lost traction due to heightened market volatility. From Rs. 48,600 crore (US$ 5.84 billion) in FY22 to Rs. 23,000 crore (US$ 2.76 billion) in FY23, net direct equity market purchases decreased.
According to data from the Securities and Exchange Board of India (SEBI), the majority of household money was invested in equity plans. In FY23, MFs made a net investment of Rs. 1.73 trillion (US$ 20.81 billion) in the equity market, which accounted for 97% of all net household flows into MFs.
Aside from direct equity, household investments increased across a range of securities. Bank deposits increased 32% year on year in FY23, reaching Rs. 10.3 trillion (US$ 123.94 billion). Net inflows into life insurance funds and small savings climbed by 15% and 7.5%, respectively.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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