A sharp rise in assets under management of mutual funds, primarily driven by inflow of retail money over the last couple of years has significantly lifted the profitability of fund houses focusing on retail AUM. In the financial year 2016-17, the top six fund houses (in terms of assets under management) saw their net profit jump 22 per cent from an aggregate of Rs 1,778 crore in FY16 to Rs 2,171 crore in FY17.
In November 2017, the industry AUM hit a new high of Rs 22.79 lakh crore. The equity AUM has nearly quadrupled from Rs 166,826 crore in April 2014 to Rs 656,269 crore as of November 2017 even though in the same period overall industry AUM rose from Rs 945,321 crore to Rs 2,279,032 crore. Industry insiders say that a large component of equity investment is retail investment and a jump in retail AUM has led to sharp growth in profits for many fund houses.
