The AAUM (average assets under management) of the mutual fund industry is at an all-time high. The latest AMFI data shows that AAUM of the MF industry crossed Rs.23 lakh crore to reach Rs.23.25 lakh crore in January 2018. It increased by 2.8%, or Rs.64,000 crore, from Rs.22.61 lakh crore in December 2017.
AMFI monthly data shows that the month-end AUM was Rs.22.41 lakh crore. The industry received net inflows of Rs.1.06 lakh crore in January 2018.
While AAUM is the average assets of the entire month that is calculated by factoring in all working days of the period, month-end AUM is the assets of the industry as on the last working day of the month.
In the last five and half years, the AUM has increased three and half times, from Rs.5.87 lakh crore as on March 2012 to Rs.22.41 lakh crore as on January 2018. The data shows that in a span of three and half years, the AUM has increased more than two times, from Rs.10 lakh crore in May 2014.
Experts say that institutional inflows, SIP inflows from retail investors and mark-to-market gains have resulted in the growth of AUM in the MF industry.
“Typically, in the first month of every quarter, we see strong inflows in liquid funds after redemption in the previous quarter. Also, short-term rates are going up; hence it has become more attractive for institutions to park their excess funds in liquid and ultra-short-term funds,” said Vidya Bala, Head of Mutual Fund Research at fundsindia.com.
She also adds that inflows to equity funds have marginally reduced due to the cautionary approach of investors ahead of the Union Budget 2018.
On the other hand, Radhika Gupta, CEO, Edelweiss Mutual Fund, believes that the demand for equity fund has remained strong. “We have not seen any redemption in equity funds because of the Budget. Majority of equity investors are mostly SIP investors. They stay invested despite near-term volatilities,” Radhika said.
AMFI data shows that the industry had nearly 2 crore SIP accounts in January. The total SIP account stood at 1.97 crore, up by 17 lakh from December 2017. The industry added about 9.26 lakh SIP accounts each month on an average during FY 2017-18, i.e., 31,000 new SIP accounts were opened each day. The industry collected Rs.6,644 crore through SIP in January, an increase of Rs.422 crore from December 2017.
