The Indian mutual fund industry achieved a new milestone in October 2024, with its assets under management (AUM) reaching INR 68.5 lakh crore. This represents a modest 0.7% month-on-month (MoM) increase and a significant 43.3% year-on-year (YoY) growth. The AUM has surged by an impressive 177.2% since the post-pandemic lows, signaling a robust recovery and investor confidence.
Key Drivers of Growth
October witnessed net inflows of INR 2.4 lakh crore, a sharp turnaround from the INR 71,114 crore net outflows recorded in September. This growth was fueled by a 20.4% MoM decline in redemptions and a 4.8% rise in funds mobilization. Notably, systematic investment plan (SIP) contributions reached a record INR 25,323 crore, up 3.3% MoM, as investors favored disciplined, long-term wealth accumulation amid market fluctuations. SIP assets under management climbed to INR 13.3 lakh crore, accounting for nearly 20% of the total industry AUM.
However, the AUM of close-ended schemes dipped slightly to INR 26,767 crore, marking its first decline in six months, while its contribution to the overall AUM remained steady at 0.4%.
Actively Managed Funds Dominate
Actively managed funds continued to dominate the mutual fund landscape, contributing INR 56.7 lakh crore or 82.7% of the total AUM in October. Within the INR 38.8 lakh crore equity AUM (-0.8% MoM), active equity funds accounted for INR 30.4 lakh crore (-0.9% MoM), while passive equity funds, including ETFs, represented INR 8.4 lakh crore. Debt funds, comprising 27.8% of the total AUM, reached INR 19.1 lakh crore (+3.6% MoM), with only 3% managed passively.
Hybrid funds also experienced growth, with their AUM increasing to INR 9.2 lakh crore (+0.9% MoM), slightly raising their share to 13.5% in October.
Growth Led by Active Debt Schemes
While active equity AUM declined slightly by 0.9% MoM, it saw a robust YoY growth of 59.4%, contributing 44.4% to the overall AUM. Active debt schemes emerged as a growth driver, with their AUM rising by 4.3% MoM to INR 17 lakh crore, marking the first increase in 17 months. However, on a YoY basis, the share of debt funds in total AUM dropped from 29.9% in October 2023 to 24.9% due to the removal of indexation benefits in 2023.
Read More: Gorilla Investing: A Bold Strategy for Exceptional Portfolio Growth
X (formerly, Twitter) - Aayush Khanna
LinkedIn - Aayush Khanna