Retail investors garner a lion’s share of the Indian mutual fund industry in just over a decade!

financialexpress.com:

– By Ashwini Kumar

The Indian mutual fund industry has seen its AUM (assets under management) more than double in the last four years to Rs 54.54 lakh crore in February 2024, as compared with Rs 23.16 lakh crore in February 2019. While there are several interesting factors that have contributed to this steady and exponential growth, one of the most significant of them is the story of retail participation. As on January 2024, retail or individual investors accounted for over 60 per cent of the industry’s AUM at Rs 31.79 lakh crore, this is in stark contrast to the scenario in 2013 when the industry barely had any retail footprint. 

The significant surge in retail participation is backed by a steady growth in the Indian economy, robust, transparent and forward-looking regulatory framework, growing awareness and enhanced reach through digitisation and technology. The strong macroeconomic fundamentals of the Indian economy and resilient earnings growth are likely to help sustain the growth momentum and ensure steady inflows into the industry. This will augur well for the retail investors who are investing a significant chunk (nearly 84 per cent) of their assets in equity-oriented schemes. 

It is to be noted that equity-oriented schemes derive nearly 88 per cent of their assets from individual investors.  

Let us take a look at some of the key factors that have contributed to increased participation of retail investors: 

India – a bright spot in the global economy

The fundamentals of the Indian economy have remained intact thereby insulating the domestic economy from global shocks. The robust growth in Indian stock markets, despite short term volatility, is attracting the attention of foreign investors, which has helped