BENGALURU, Sept 10 (Askume) – Total mutual fund assets in India hit an all-time high of 66.7 trillion rupees ($794.45 billion) as of end-August and are expected to grow by about 16 trillion rupees by 2024.
Data released by the Mutual Fund Association of India on Tuesday showed that inflows into equity mutual funds rose 3% quarter-on-quarter to Rs 38,239 billion in August, marginally lower than the record Rs 40,608 billion in June.
India’s benchmark stock index is expected to rise 15.5% in 2024 after gaining 20% last year, attracting retail investors to invest in the stock market through funds and direct investments.
Total inflows into equity mutual funds nearly tripled year-on-year to Rs 2.41 trillion in the first eight months of 2024, the sharpest rise on record, with thematic and sector funds accounting for 45% of total inflows.
Indian equity mutual funds have seen a total inflow of Rs 6.74 trillion since March 2021, helping the stock market rise 74% since then to a record high and reducing the volatility of foreign outflows.
The benchmark index rose nearly 1.1% in August as inflows into the stock market surged. Investor interest in large-cap funds increased, with inflows into the sector nearly quadrupling month-on-month to Rs 2,687 crore, the highest level since March 2022.
Despite concerns about the sector’s high valuations, inflows into small-cap funds rose 52% this month and inflows into mid-cap funds almost doubled.
The Nifty Mid-Cap 100 (.NIFMDCP100) and Small-Cap 100 (.NIFSMCP100) gained 0.9% and 0.5%, respectively, in August, less than the benchmark.
“Strong net inflows into NFOs (new fund offerings) indicate their continued appeal to investors,” said Himanshu Srivastava, associate director, manager research, Morningstar Investment Research India.
“However, investors should be cautious while selecting funds, especially funds across industry/theme categories. Such funds offer high-return investment propositions but are high-risk and may not be suitable for every investor’s portfolio,” Srivastava said.
Contributions to the Systemic Investment Programme (SIP) rose to a record high of Rs 23,547 crore in August, marking the 14th consecutive month of record highs.
(1 USD = 83.9570 Indian Rupees)
