Mutual funds witness record surges in two years as pandemic instils financial discipline

Continuous investor inflows have pushed mutual fund assets under management (AUM) beyond Rs. 38 lakh crore (US$ 488.15 billion) for FY22, following a dramatic recovery from Covid-19 lows.

For the first time in March, the equity segment's AUM at Rs. 13.6 lakh crores (US$ 174.71 billion) overtook the debt segment's AUM at Rs. 12.9 lakh crores (US$ 165.72 billion). By comparison, just two years ago, in March 2020, equity AUM stood at just Rs. 7 lakh crore (US$ 89.92 billion), while debt AUM was at Rs. 10.3 lakh crore (US$ 132.31 billion). Since then, AUM has been steadily increasing month after month. Even when considering hybrid or multi-asset schemes, the equity allocation is significantly larger.

Benchmark equity indices more than doubled between March 2020-October 2021, drawing a slew of new investors to the stock market.

Newer mutual fund investors can also be found among young graduates who have just started working, as well as among those who have switched to the work-from-home (WFH) format. They are technologically competent and easily adapt to internet investing. Investors have begun to invest in mutual funds as a result of Covid-19 lockdowns and low interest rates. Job insecurity has also taught us the value of consistent savings, which is shown in monthly systematic investment plan (SIP) inflows.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.