Of the total Rs. 5.25 lakh crore assets held by individual investors as on December 2014, Rs. 2.82 lakh crore is in equity funds.
Individual investors are flocking to equity funds. AMFI data shows that individual investors have put a major portion of their mutual fund investments in equity schemes. Both retail and HNIs have invested 55% of their total mutual fund investments in equity funds.
As on December 2014, of the total Rs. 5.25 lakh crore assets held by individual investors, Rs. 2.82 lakh crore is in equity funds. In December, the total AAUM of equity mutual funds reached an all-time high of Rs. 3.20 lakh crore due to mark to market gains and inflows in existing schemes as well as new funds.
Vishal Dhawan of Plan Ahead Wealth Advisories is of the view that individual investors prefer equity funds over debt funds. “Individual investors especially retail investors, look at mutual funds primarily as an equity asset. Debt funds are complicated for retail investors to understand. Also, ease of investing through SIP and tax efficiency of ELSS over other tax saving instruments has helped equity funds gain popularity among retail investors.”
Also, the contribution of individual investors in mutual fund assets has increased from Rs.3.99 lakh crore in March 2014 to Rs.5.25 lakh crore in December 2014, a growth of 32% in just nine months. Their share in mutual fund assets grew to 46% in December from 44% in March.
Vikaas Sachdeva, Chief Executive Officer, Edelweiss Mutual Fund attributed this trend to the superior performance of majority of equity funds. “Equity as an asset class is doing well and delivering spectacular returns over the last one year. Whenever an asset class does well, investors flock to it.”
While both retail and HNIs primarily had large chunk of investments in equity schemes, institutional investors preferred to invest in liquid and debt funds. Institutional investors held 90% of mutual fund investments in liquid funds and debt oriented schemes.
Overall, assets of institutional investors in mutual funds has also grown from Rs. 5.05 lakh crore in March to Rs. 6.09 lakh crore in December.
