16, Jan 2024
Indian Mutual Fund Industry Surpasses Monumental ₹50 lakh crore AUM Milestone on the back India Growth Story – AMFI
Bengaluru, 16th January 2024: In a significant testimony to the robust growth and resilience of the Indian Mutual Fund Industry, Association of Mutual Funds in India (AMFI) announced surpassing ₹50 Lakh Crores of Assets Under Management (AUM), a remarkable milestone achieved by the mutual fund (MF) sector. This noteworthy achievement comes against the backdrop of India growth story, highlighting the MF industry’s ability win investor trust by providing low-cost, long-term-oriented wealth creation avenues.
The focus of Prime Minister Narendra Modi on enhancing economic growth through heightened investments and initiatives aimed at revitalizing the country’s economy post-COVID, coupled with FM Nirmala Sitharaman’s push for financialization of savings and financial inclusion has led to many first time Mutual fund investors joining the fold and contributing to surge in mutual fund investments. The number of unique mutual fund investors more than doubled over the last five years from 1.91 crores in December 2018 to 4.21 crores in December 2023.
Mr. Navneet Munot, Chairman of AMFI, commented on this milestone, saying, “We are elated to announce the achievement of ₹50 lakh crore AUM, which is a testament to the trust that investors place in the Indian Mutual Fund Industry. On this momentous achievement, we would like to thank and congratulate the regulator, SEBI, all our distributors and investment advisers, all MF industry stakeholders, our member AMCs and above all, the mutual fund investors. The mutual fund Industry is geared up for the next growth milestone of ₹100 Lakh Crores AUM and 10 crore investors, which we are sure will be achieved sooner than expected as the industry has shifted gears to accelerate distribution outreach leveraging technology across the value chain.”
Mr. Venkat Chalasani, Chief Executive of AMFI, shared his perspective on the industry’s achievement, stating, ” While the MF industry took almost 50 years to build the first ₹10 Lakh crores of AUM, the last INR 10 Lakh Crores, from ₹40 Lakh Crores to ₹50 lakh crores was amassed in just over a year. The entire mutual fund industry in India including the AMCs and the Regulator have put in focused efforts to reach investors across the country with support from the MF distributors.
The MF industry has continued to evolve over the years, offering a diverse range of investment options. It also emphasizes the collaborative efforts of various stakeholders in fostering a robust investment ecosystem.” He further added, “The more encouraging aspect is the constant retail participation in a disciplined manner through the systematic investment planning (SIP) route. The B30 locations have instilled a new drive in the MF investment and the distributor fraternity has been working towards deeper financial inclusion.”
The Indian Mutual Fund Industry has witnessed sustained growth in the recent years, driven by factors such as increasing financial literacy, regulatory reforms, and a shift towards SIPs. The monthly gross SIP inflows, which was around ₹8,000 crore in FY20, have now scaled up to an all-time high of ₹ 17,610 crores in December 2023 with cumulative inflows through SIPs alone crossing ₹ 1,41,000 crores. The SIP AUM as at the end of December 2023 touched ₹10 Lakh Crores, which is another significant milestone.
The ‘Mutual Fund Sahi Hai’ investor awareness campaign run by AMFI under the aegis of SEBI has led to increased awareness and acceptance of mutual funds as an investment option of choice.
AMFI believes that the industry is geared up to surpass the ₹100 Lakh Crore AUM mark by the turn of the decade. Achieving this growth will require an increase in the investor base from 4.21 crores to 10 crore investors. AMFI will follow three distinct categories of market expansion that will be essential to achieve this target – Distribution outreach, Inclusion of middle-income households through simplification and digitalisation, and higher wallet share of household savings.
The Industry’s AUM crossed the milestone of ₹10 Lakh Crore for the first time at the end of May 2014 and in a short span of about three years the AUM size had increased more than two folds and crossed ₹20 Lakh Crore for the first time in August 2017. The AUM size crossed ₹30 Lakh Crore for the first time in November 2020. And the industry’s AUM topped ₹ 40 Lakh Crores for the first time in November 2022. The AUM, which took 24 months to go from ₹ 30 Lakh Crores to ₹ 40 Lakh Crores, added the next ₹ 10 Lakh Crores in half the time, as it touched ₹ 50 Lakh Crores in the month of Dec 2023. At the end of Dec 2023 with ₹50 Lakh Crores mark in AUM, the Mutual Fund Industry has witnessed growth of ₹40 Lakh Crores AUM in 9 years.