8.12.15

Retail investors push equity MF assets to record Rs 4,00,000 crores


For the first time in the history of Indian mutual fund industry , total equity assets managed by fund houses in the country crossed the Rs 4-lakh-crore mark, indicating the return of domestic investors to the stock market who are now taking the mutual fund route. Strong returns in stocks since 2013 and an increased awareness about the importance of investing through the systematic investment plan (SIP) route have boosted flows into equity funds.
The current year also showed another change in trend: it's for the first time ever that net investments by domestic institutions have been more than that of their foreign counterparts since the latter were allowed to invest in India in 1992. So far in 2015, while foreign portfolio investors (FPIs) have net infused Rs.16,457 crore into Indian stocks, mutual funds have net invested more than four times that amount, at Rs.68,766 crore. They have now grown to a size where they can be a counterbalance to FPIs, something which the finance ministry has long been looking for.
Data compiled by Crisil Research showed that despite a volatile stock market -the sensex scaled its all-time peak at 30,025 points on March 4 this year and touched a low of 24,833 on September 8 -investor sentiment was not dampened as November was the 19th consecutive month of net inflows in equity schemes. However, thanks mainly to the strong outflows from the liquid funds, total assets managed by the 44 fund houses in India dipped marginally by 2.2% in November to Rs.12.95 lakh crore, Crisil Research pointed out.
“Investor experience with equities has been quite good since 2013. Returns (from equities) have also been much higher than other asset classes,“ said Sankaran Naren, chief investment officer, ICICI Prudential MF. Compared to 31.4% total return in the sensex since the start of 2013, gold has given a negative return of 15.2%, while the real estate, measured in terms of Residex by National Housing Bank, has given a 7% return.
Investors have also been realizing the importance of investing in a way that could beat the rate of inflation, and so have been putting more money into stocks.
According to Naren, substantial amount of money is also coming through SIPs. AMFI officials say that average monthly fund flows through the SIP route is now at about Rs.2,500 crore, more than double of what it was at the start of the year. And fund industry officials say about 90% of the SIP inflows are into equity schemes.

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