Investment of mutual funds in NSE firms touches a record high of 10 per cent: Report
Passive funds within mutual funds also hit a peak share of 2 per cent. Individuals' holding, directly and through mutual funds, remained steady at a record high of 18 per cent of the market with a current holding of ₹ 74.5 lakh crore, a compounded annual growth rate of 17 per cent over five years, according to the NSE Market Pulse report released on Thursday.
However, individual investors' direct ownership dipped to 9.5 per cent, suggesting growing popularity of MFs as a preferred vehicle for equity investment by retail investors.
Akshat Garg, AVP, Choice Wealth, said individual investors are increasingly channelling incremental money into mutual funds and the shift has been structural, not cyclical, wrote Business Line.
The surge in SIP flows, especially from tier-II and -III cities, reflects growing investor maturity, but at the same time, direct equity investing has become more volatile and time-consuming, prompting retail investors to delegate that complexity to fund managers, he added.
Strong performance of Indian equities, coupled with rising participation, has resulted in a significant increase in household wealth over the last few years.
'Our estimates suggest that the household wealth in Indian equities increased by over ₹ 46 lakh crore in the last five fiscal years,' said the report.
Since June 2021, with a strong SIP-led inflows, MF ownership in NSE-listed firms has climbed steadily, reaching all-time highs.
Meanwhile, investors pumped money into debt mutual funds in April as they sought lower-risk options to ride out the market volatility and to rebalance their portfolios at the start of the financial year, taking net inflows into these funds to the highest in over two decades.
Net inflows into debt-oriented open-ended mutual fund schemes were at ₹ 2.19 trillion in April—the highest since January 2005, from when this data is available. The net inflows marked a sharp reversal from March, when debt-oriented schemes witnessed outflows of ₹ 2.02 trillion.
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