Robust inflows in liquid funds and a strong participation form retail investments have lead assets under management of India's Mutual Fund industry surging by 8.41% in one month.
Data from Association of Mutual Funds in India suggests that the asset base touched a record high of Rs 25 lakh crore in August-end.
AUM of 42 fund houses at the end of July stood at Rs 23.06 lakh crore. The total asset base of all the fund houses put together was Rs 20.6 lakh crore in August last year.
The industry's AUM had crossed the milestone of Rs 10 lakh crore for the first time in May 2014 and in a short span of about three years, the asset base had increased more than two folds and crossed Rs 20 lakh crore in August 2017. Now, the industry AUM stood at an all-time high of Rs 25.2 lakh crore at the end of August.
AMFI's Chief Executive NS Venkatesh was quoted as saying that this rise was majorly owing to strong investor awareness campaigns and participation from retail investors. Besides, Systematic Investment Plans (SIPs) continue to be the fancy of retail investors and people continue to invest through the route as it allows investors to invest in small amounts periodically instead of lump sum, he said.
He further explained that SIP helps in rupee cost averaging and also in investing in a disciplined manner without worrying about market volatility and timing the market.
Arun Thukral, MD and CEO at Axis Securities explained in a note that the growth of the MF industry showed the evolving nature of investments.
"It took 21 years for the MF industry to reach Rs 10 lakh cr AUM since private AMCs debuted in 1993. Next Rs 10 lakh crores was added in just 4 years and guess what; it took only 1 year to add another Rs 5 lakh crores to the MF AUM."
He said this showed "evolving mindset of India retail investors who are looking at growth assets vs traditional asset classes"