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MF News Individual investors overtakes institutional investors in MF AUM

Individual investors overtakes institutional investors in MF AUM

Individual investors hold 53% of the MF assets as of October 2018.
Shreeta Rege Dec 2, 2018

The latest AMFI data shows that individual investors have overtaken institutional investors in terms of MF holdings as they hold 53.3% of MF assets in October 2018 compared to 49% a year ago. For long, institutional investors have dominated the MF landscape but from December 2017 the balance has shifted favour of individual investors.

Individual investors include retail and high networth individuals.

Along with the individual investor story, the equity story also seems to be reigning supreme.  AMFI data shows that 67% of the individual investor assets are invested in equity schemes and only 26% are invested in debt-oriented schemes, indicating a clear preference for equity amongst individual investors. Further analysis of equity assets of MF reveals a similar picture. Out of the total equity assets, 87% come from individual investors while the share of institutional investors in equity assets is just 13%.

The sustained rally in equity markets since 2013 is an important factor contributing to the increased interest in equities. In addition, AMFIs investor awareness initiative ‘Mutual Funds Sahi Hai’ has helped generate curiosity about mutual funds amongst retail investors across geographies. Also, advisors and distributors have played an important role in channelizing this interest into mutual funds in form of SIPs, said experts.

This have brought about regular stream of investments in the MF industry. As of October 2018, MF receive monthly SIP inflows to the tune of Rs. 7,985 crore, an increase of 42% in a year. Importantly, these inflows have held up despite volatility in both equity and debt markets. Some experts also attribute this stickiness to the TINA factor namely ‘there is no alternative’. With bank FDs offering lower returns, real estate and gold showing no significant appreciation in value, investors continue to invest in equities with a view to create long term wealth.

Will this investor interest sustain despite ongoing volatility in equity markets, let us hope it will.

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