FII’s took out around 1lakh cr from the market but the strength of maturity of the mutual fund industry leads to a significant inflow. The concept of SIP is now in the blood of investors and Tier 2 and 3 cities growth and penetration is the key contributor for SIP. But among these so many good things the biggest question is how long the show will go if FII's are near by the same pattern of October 2024. Will the SIPs continue? Will investors keep investing in Mutual Funds when the markets keep falling or they will withdraw themselves from investing?
Well, the only answer will be given by time but what is predicted is that Indian retail investors are now mature enough and have clear thought lines on their goals. At the same time, financial advisors have played a pivotal role in bringing the MF industry to such new heights and getting the sip concept engraved in the minds of investors. Financial advisors have guided the investors through SIP and Mutual Funds to create long-term wealth and fulfilment of goals.
There was a time in 2010-11 when FII's pulled out Rs 50000cr and the Nifty tanked by 50% and now in 2024 even after Rs 1lkh cr redemption by FII's MF industry achieves new highs.
Apart from SIP, the whole MF industry achieved a stupendous
growth.
1. AUM Growth:
The Mutual Fund industry's Assets Under Management (AUM) reached ₹67.3
lakh crore in October 2024. This represents a muted growth compared to ₹67.1
lakh crore in September 2024, likely due to market corrections and
volatility.
2. Annual AUM
Increase: Starting from ₹49.0 lakh crore in November 2023, the AUM
has seen steady growth throughout 2024, crossing major milestones:
- ₹50.8
lakh crore in December 2023.
- ₹57.3
lakh crore in March 2024.
- ₹65.0
lakh crore in July 2024.
- Finally
reaching ₹67.3 lakh crore by October 2024.
3 Market Influence:
The description highlights that the growth in AUM during October 2024 was
influenced by market corrections and heightened volatility, particularly linked
to uncertainties around the U.S. presidential elections.
SIP Growth
October 2024 data, as reported by AMFI, clearly illustrates
a strong upward trend in retail investment through SIPs (Systematic Investment
Plans) and equity fund inflows. Let's summarize the key insights again:
1. Record-breaking SIP Inflows:
- SIP
inflows hit ₹25,322 crore in October 2024, setting a new high, up
from ₹24,509 crore in September 2024. This sharp increase, despite
market corrections, shows investors' resilience and confidence in
systematic investments during volatile times.
2. Expansion of SIP Accounts:
- The
number of SIP accounts surged to 10.12 crore in October 2024, with
a net addition of 24.19 lakh accounts, pointing to an expanding
retail investor base.
3. SIP AUM Growth:
- SIP
AUM reached ₹13.81 lakh crore in September 2024, rising from ₹13.39
lakh crore in August, reflecting sustained interest in mutual funds.
4. Consistent SIP Growth:
- SIP
inflows have grown from ₹3,122 crore in April 2016 to ₹25,000 crore
in October 2024, with a 30% CAGR, demonstrating SIP's appeal as a
long-term investment tool.
5. Equity Fund Inflows Surge:
- Equity
fund inflows surged 21.69% MoM to ₹41,887 crore in October
2024, signaling robust retail participation in equity markets despite
bearish trends.
6. Mutual Fund Industry AUM:
- The
total industry AUM stood at ₹67.25 lakh crore, showcasing the
expanding scale of the Indian mutual fund sector.
Over the
past year, SIP contributions have shown consistent growth. Starting from ₹17.1K
crore in November 2023, the contribution has steadily increased
month-over-month, reflecting growing investor confidence in mutual funds.
- SIP contributions crossed ₹20K crore in April 2024. The
contribution continued to rise, surpassing ₹23K crore in July 2024,
and then reaching the current peak of ₹25.3K crore in October 2024.
MF Industry's Equity Inflows
for October 2024.
1. Significant Growth in Equity Inflows:
Equity inflows surged to ₹41.9K crore in October 2024, up from ₹34.4K
crore in September 2024, marking a substantial increase as investors took
advantage of the market dip.
2. Investor Behavior: The rise in equity
inflows reflects an investor trend of "buying the dip," especially in
large-cap equities. This suggests that retail and institutional investors are
using market corrections as an opportunity to increase their exposure to equities.
3. Yearly Overview:
- The
inflows fluctuated throughout the year, starting at ₹15.5K crore in
November 2023, gradually increasing, and reaching a peak of ₹40.6K
crore in June 2024.
- Despite
some dips (like in April 2024 when inflows were ₹18.9K crore), the
overall trend has been upward.
Conclusion
The consistent growth in SIP inflows and mutual fund AUM,
even in the face of market corrections, reflects the growing maturity and
sophistication of retail investors in India. The steady increase in SIP
accounts and robust equity inflows indicate that investors are embracing
systematic, long-term investment strategies rather than reacting impulsively to
market conditions.
This data supports the narrative of disciplined investment
behaviour, with SIPs serving as a preferred tool for wealth accumulation and
portfolio diversification among retail investors. The overall growth in AUM
also demonstrates the deepening penetration of mutual funds in India’s
financial landscape.
1 Comments:
Nicely explained.
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