MF assets rise 42% to Rs.17.54 lakh crore in FY 2016-17

The assets under management of the mutual industry rose 42 % in FY 2016-17 i.e. from Rs.12.33 lakh crore to Rs.17.54 lakh crore, shows the latest AMFI data. Experts attribute this to the rise in assets of equity funds and mark to market gains.

“There has been very strong retail participation in both categories - equity and fixed income but the industry has received huge inflows in equity. SIPs have also gone up by a significant amount. Currently, the industry has been receiving over Rs.4000 each month through SIPs. In addition, the mark to market gain is also one of the strong contributors in AUM growth,” said G. Pradeepkumar, CEO of Union Mutual Fund.

Anil Chopra - Group Director, Bajaj Capital said, “Financial Year 2016-17 has been a golden year for mutual fund industry as net inflows into equity mutual funds have been positive in each month without exception. Much of the credit can be given to maturity of retail investors who have come up in the “learning curve” by contributing 1.3 crores monthly SIPs adding more than Rs.4,000 crores.”

Thanks to higher inflows in equity funds, the AUM of equity funds rose 40% in FY 2016-17.  If we include ELSS, balanced funds and ETFs that track indices, the overall growth in the equity category went up to 52% in FY 2016-17 i.e. to Rs.6.73 lakh crore in FY 2016-17 from Rs.4.41 lakh crore in the preceding fiscal.

In fact, the inflows in equity category stood at Rs.12,500 crore in March. The rise in the inflows of equity funds is mostly due to investments by the retail investors through SIPs. Inflows in balanced funds was highest at Rs.5,952 crore, followed by equity funds and ETFs at Rs. 5,310 crore and  Rs. 3,599 crore, respectively.

Similarly, ETFs witnessed 176% rise in assets in FY 2016-17 on the back of investor demand for the further fund offer of Reliance CPSE ETF. 

Overall, the MF assets fell 1.9% in March to Rs.17.55 lakh crore chiefly on the back of redemption from debt funds as corporates redeem their MF investments to meet advance tax liability.  

Chopra said, “In the month of March there has been net negative flow in debt funds and this is nothing unusual as every year in the month of March all big Corporates redeem funds from debt funds to meet their March 15 advance tax payment liabilities. It is expected that a major part of this net negative debt flow will come back in the month of April.”

Net inflow/(outflow) and AUM as on March 31, 2017

Source: AMFI