India now has 2.28 crore unique mutual fund investors as against 2.08 crore investors a year ago.
"The number of unique investors across mutual fund schemes increased by 10% from 2.08 crore as on March 31, 2020 to 2.28 crore as on March 31, 2021," the Ministry of Finance said in a press release.
In the same period, AUM of mutual funds went up by 41% to Rs 31.43 lakh crore. The AUM was at Rs 22.26 lakh crore at the end of FY20.
"Indian capital market has shown its resilience to withstand the ripples caused by exogenous shocks like the pandemic," the release said.
The data showed rising penetration of mutual funds in smaller cities. The AUM from B30 cities registered a rise of 54% last financial year. As on March 31, 2021, the AUM from these cities was Rs 5.35 lakh crore as against Rs 3.48 lakh crore at the end of March 2020.
Industry officials attributed joint efforts of AMCs and distributors for this addition of new investors and rising penetration. "It’s a remarkable achievement for the industry — thanks to joint effort of MFs and advisors/ MFDs. Given that there were significant restrictions in normal prospecting activities, the industry has still managed to add new investors. Innovation and rapid adoption of digital technologies have helped. It also validates once again the attractiveness of MFs among retail investors," said Vishal Kapoor, CEO of IDFC Asset Management.
There were other factors at play as well. "There was a steep fall in the markets last year in the month of March. Many investors saw this as a starting point as the market seemed attractive," said Hemant Rustagi, CEO of Wiseinvest Advisors.
What lies ahead?
Experts see similar additions in number of MF investors in years to come. They cite low penetration and rising investor awareness as the driving forces.
“The numbers are encouraging but it is still very low if you compare it to the overall population. With the kind of efforts the industry is putting, I believe this base will continue to grow," Rustagi said.
