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Business Standard
21-05-2025
- Business
- Business Standard
Retail MF investors' patience is helping provide risk capital to India Inc
Ideally, equity portfolios should be diversified and held over the long term to capture growth trends across the corporate landscape and to allow for compounding effects Business Standard Editorial Comment Mumbai Listen to This Article The latest Annual Report of the Association of Mutual Funds in India (Amfi) indicates that household investors are rapidly adopting mutual funds (MFs). More retail investors are investing through MFs and they are investing in a disciplined, staggered fashion by using systematic investment plans (SIPs). They are also holding their portfolios longer. All this augurs well for the Indian economy, as well as for the prospects of household wealth creation. As household funds move into equity assets, new businesses receive easier access to capital, which will help boost entrepreneurship. Since fund allocation is done by professionals, there is less risk
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Business Standard
19-05-2025
- Business
- Business Standard
Mutual fund assets surge 23% to hit record Rs 65.74 trillion in FY25
Mutual fund assets surged 23 per cent or over Rs 12 trillion year-on-year to reach a record of Rs 65.74 trillion in FY25, propelled by robust net inflows and mark-to-market gains amid buoyant equity and debt markets. In comparison, the assets under management of the industry stood at Rs 53.40 trillion in March 2024. "The asset base expanded partly owing to mark-to-market (MTM) gains, spurred by equity markets clocking positive returns, as reflected in the Nifty 50 TRI and Sensex TRI rising 6 per cent and 5.9 per cent, respectively. Debt markets also contributed positively through MTM gains, supported by favourable yield movements," according to the Association of Mutual Funds in India's (Amfi) annual report released on Monday. Also, the increase in AUM was attributed to net inflows summing up to Rs 8.15 trillion during fiscal 2025. The sharp surge in asset base was also reflected in the growing numbers of investors, mutual funds, with the number of folios reaching an all-time high of 234.5 million and an investor base of about 5.67 crore. A notable trend in the fiscal was a 33.4 per cent year-on-year increase in folios of equity-oriented schemes to 16.38 crore. The scheme continued to constitute a lion's share of the folios at 70 per cent. Also, the folios of hybrid schemes increased by 16 per cent to 1.56 crore, while other schemes, including index funds and exchange-traded funds (ETFs), surged 48.3 per cent to 4.15 crore folios. In contrast, debt-oriented scheme folios declined 3 per cent to 69.5 lakh. The systematic investment plans (SIPs) were popular among investors as flows into this segment rose sharply, with yearly contributions rising by 45.24 per cent to Rs 2.89 trillion in FY25. This substantial increase, along with MTM gains, saw SIP assets rise 24.6 per cent to Rs 13.35 trillion, thereby accounting for 20.31 per cent share of the overall MF industry's AUM. As of March 2025, the industry had a total of 5.34 crore unique investors. Of this, 26 per cent or 1.38 crore were women. "This represents an increase from 24.2 per cent in March 2024, underscoring the growing financial independence and awareness among women. The rise in literacy rates and the growing presence of women in the workforce have been instrumental in enhancing their economic contributions and, as a result, women are now emerging as a key participant in the MF investor base," the report said. Equity-oriented mutual funds saw a record inflow of Rs 4.17 trillion, the highest ever in a financial year. The net inflows during the year exceeded twice the net inflows in the previous year. This, combined with valuation gains, propelled the AUM of equity-oriented schemes by 25.4 per cent to Rs 29.45 trillion at March-end 2025. The surge in inflow across sub-categories within equity-oriented schemes was partly attributable to the successful launch of new fund offers (NFOs) during the year. A total of 70 NFOs in the equity category were launched in fiscal 2025, collectively mobilising Rs 85,244 crore, marking an increase from the 58 schemes launched in fiscal 2024, which garnered Rs 39,297 crore. Debt MFs registered net inflows of Rs 1.38 trillion last fiscal against net outflows of Rs 0.23 trillion in fiscal 2024. The category's AUM jumped 20.5 per cent to Rs 15.21 trillion in March 2025 from Rs 12.62 trillion in March 2024.
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Business Standard
09-05-2025
- Business
- Business Standard
Equity MF inflow dips in April; industry AUM hits record ₹70 trillion
Inflow in equity mutual funds dipped 3.24 per cent to Rs 24,269 crore in April amid continued market volatility against the backdrop of escalating tensions between India and Pakistan following the Pahalgam terrorist attack. This was the fourth consecutive month of decline in inflow in equity funds. Also, the latest fund infusion by investors marks the 50th consecutive month of net inflows into the segment. Apart from equity, debt funds registered an inflow of Rs 2.19 trillion in the month under review after seeing a withdrawal of Rs 2.02 trillion in March. Overall, the mutual fund industry experienced an infusion of Rs 2.77 trillion in April as compared to an outflow of Rs 1.64 trillion in the preceding month. The inflow has lifted the industry's asset under management to a record Rs 70 trillion as of April from Rs 65.74 trillion at March-end, data released by Association of Mutual Funds in India (Amfi) on Friday showed. According to the data, equity-oriented mutual funds saw an inflow of Rs 24,269 crore in April, lower than Rs 25,082 crore in March. In February, such funds witnessed an inflow of Rs 29,303 crore, Rs 39,688 crore in January and Rs 41,156 crore in December. "While this marks a slight decline of 3.24 per cent compared to Rs 25,082 crore in March, the quantum of flows remains significant, especially in the backdrop of a challenging global landscape and escalating geopolitical tensions between India and Pakistan following the Pahalgam terrorist attack on April 22," Himanshu Srivastava Associate Director- Manager Research, Morningstar Investment Research India, said. Within the equity fund categories, Flexi Cap Funds recorded the highest inflows in April, attracting Rs 5,542 crore. However, equity linked saving schemes saw an outflow of Rs 372 crore. In April, mid-cap and small-cap mutual funds continued to attract investor interest, with inflows of Rs 3,314 crore and Rs 4,000 crore, respectively. Large-cap funds received Rs 2,671 crore as compared to Rs 2,479 crore in March.
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Business Standard
29-04-2025
- Business
- Business Standard
Large investor concentration in smallcap funds at 14-month low, shows data
The share of investments held by the top 10 investors across smallcap mutual fund schemes has been on a decline, falling to a 14-month low in March 2025, shows an analysis of data from the Association of Mutual Funds in India (Amfi). The median smallcap scheme has 2.03 per cent of its investments coming from the top 10 investors, compared to 2.43 per cent a year ago. The reduction comes as smallcaps have fallen twice as much as largecaps in the recent market decline. The BSE SmallCap index is down 16.6 per cent compared to 6.6 per cent fall in the BSE Sensex from their respective all-time highs. The reduction in investor concentration gains significance as smallcap companies tend to see a decline in liquidity during downturns. This can affect a scheme's ability to exit stocks. Lower concentration reduces the risk of having to sell positions at a lower price to meet redemptions, potentially worsening the decline for those remaining in the fund. The median is the middle value of the 30 smallcap funds for which data is available. Some funds have significantly higher concentration. This includes the ITI Small Cap Fund (19.92 per cent from top 10 investors) and Trust MF Small Cap Fund (22.83 per cent from the top 10). Stress tests show that the Trust Small Cap MF scheme can liquidate 50 per cent within a single day (compared to a median of seven days for other schemes), said Trust Mutual Fund chief executive officer (CEO) Sandeep Bagla. The Trust MF fund was launched only in November 2024. It is also smaller in size than other funds. Both these factors may have contributed to the relatively higher weight of larger investors, said Bagla. Some of the initial investors are often entities writing checks worth ₹5 crore or more which come in through wealth managers and other large distributors. The large initial investments would translate into greater concentration for a smaller fund. The concentration declines as more investors come in, according to Bagla. Indeed, disclosures show that concentration of the top 10 investors was as high as 29.37 per cent in November 2024, and has come down since to 22.83 per cent even as the assets rose from ₹405.1 crore to ₹817.1 crore as of March-end. 'We do not have concerns on liquidity,' said Bagla. A query sent to ITI did not elicit a response. ITI Small Cap Fund can, similarly, liquidate 50 per cent of its portfolio in two days even under stress conditions compared to the median seven days. The median days for 50 per cent liquidation for the smallcap segment were similar to the 6.5 days seen in February. Kartik Jhaveri, director, Transcend Capital, said that advisors and distributors generally avoid new funds till they build a track record. While concentration can be one more metric to consider, others like historical volatility and performance tend to take precedence, he said. 'Investors tend to focus on returns,' he said. Smallcap funds are sitting on nearly 7.4 per cent cash as a percentage of total assets in March, though it has come down from the 9 per cent level seen in February. In other words, smallcap schemes are sitting on funds worth ₹21,720 crore as of March and they can be deployed on declines or used to meet redemptions.
Business Mayor
28-04-2025
- Business
- Business Mayor
Hybrid mutual fund schemes' inflow moderates in FY25; number of investors, AUM soar
Hybrid mutual fund schemes attracted Rs 1.19 lakh crore in 2024-25, 18 per cent lower than the preceding fiscal, owing to market turbulence in the second half of FY25 triggered by corporate earnings slowdown and geo-political tensions. Despite the moderation in inflow, the category has seen a robust increase in both the number of investors and assets under management (AUM) during FY25 compared to those in the preceding fiscal, data with the Association of Mutual Funds in India (Amfi) showed. A key factor contributing to this resilience is the drawdown protection provided by the debt component of hybrid schemes. 'The drawdown protection offered by the debt component of hybrid schemes is a key reason, as it allows investors to stay invested without the stress that comes with pure equity volatility. The NAVs (net asset valued) of hybrid funds typically experience lower drawdowns compared to equity funds, making them a preferred choice for investors seeking a more stable journey,' Trivesh D, COO of Tradejini, said. Hybrid mutual funds schemes have experienced an increase in the number of investors, with the number of folios reaching 1.56 crore in March 2025 from 1.35 crore a year earlier, adding an investor base of more than 33 lakh. This shows investors' inclination for hybrid funds. This was complemented with assets under management (AUM) of the category increasing to Rs 8.83 lakh crore as of March 2025 from Rs 7.23 lakh crore in FY24, showing a 22 per cent growth. Overall, the industry added more than Rs 12 lakh crore to a record AUM of Rs 65.74 lakh crore as of March 2025. Hybrid funds are mutual fund schemes that typically invest in a combination of equity and debt securities and sometimes in other asset categories such as gold. According to the industry data, the hybrid category saw net inflows of Rs 1.19 lakh crore in FY25 compared to an inflow of Rs 1.45 lakh crore in FY24. However, the category experienced an outflow of Rs 18,813 crore in FY23. Read More Tabula IM launches Global High Yield Fallen Angels ETF 'We have seen a slight dip in net inflows from Rs 1.45 trillion in FY24 to Rs 1.19 trillion in FY25. The slowdown in inflows majorly happened in second half of the FY25 due to market turbulence driven by corporate earnings slowdown, election uncertainty and geopolitical tensions and another major reason was dip in NFOs in this category,' Feroze Azeez, Joint CEO, Anand Rathi Wealth Ltd, said. FY24 higher inflows in this category was driven by higher NFO (New Fund Offer), with 21 NFOs in FY24, whereas in FY25, the NFO count declined to 12, which led to slower inflows, he added. Hybrid funds appeal more to investors with a moderate or low-risk profile. These funds are good investment options as they reduce the volatility associated when participating in equity markets while simultaneously providing stability in the fixed-income market. Additionally, huge interest was garnered by hybrid schemes following a change in taxation for debt funds. Looking ahead to FY26, with rate cycle uncertainty, global risk-off cues, and elevated domestic valuations, Trivesh of Tradejini believes investors will prioritise funds that offer both growth and cushion. Anand Rathi Wealth's Azeez recommended investors to build a strategy-based portfolio with an 80:20 asset mix across equity and debt, which helps ride volatile markets comfortably as it reduces the volatility and improves the stability and liquidity in the portfolio. READ SOURCE businessmayor April 27, 2025
