In a recent report, UBS Securities India has said that equity funds AUM will increase by more than twice its size in the next three years. The brokerage house said that the AUM of equity funds would reach AUM of $280 billion (Rs.20.16 lakh crore in today’s INR vs Dollar terms) by March 2023.
AMFI data shows that the total equity AUM stood at Rs. 7.80 lakh crore as on January 2020.
Further, if the equity market goes through bull cycle in these three years, the equity fund AUM could go up to $410 billion (Rs.29.50 lakh crore in today’s term), says the brokerage house.
The report attributes this to earnings growth. It estimates Nifty 50 earnings to grow around 15% in 2021-23 in ‘base case’ and around 20% in a bullish market scenario, the report adds.
In debt funds, the report expects AUM to increase by three times at least. As of Jan 2020, the total debt AUM stood at 12.7 lakh crore. The brokerage house believes that the credit cycle will be supportive due to recapitalization in banking system. Also, government’s fiscal and monetary policy will be neutral and would not be a drag on growth, the report adds.
