The year that mutual funds marched ahead

livemint.com:

₹49 trillion in November, led by impressive growth in equity funds amid bullish market sentiment and strong inflows. Equity assets (including index funds) in November were up 32.3% from a year earlier. Since January, equity-oriented schemes have seen net inflows of ₹1.4 trillion, a tad lower than ₹1.5 trillion in the same period a year ago.

Slower redemptions of late also point towards growing confidence among investors, which has pushed up the net flows-to-redemptions ratio significantly. Rupesh Patel, senior fund manager for equity investments at Nippon India Mutual Fund, attributes these trends to limited investment options to generate higher post-tax returns and the “long-term track record of wealth creation", as well as “growing awareness, transparency, ease of investing and low cost" of mutual funds as an investment option. He said these factors would keep domestic investors hooked to equity markets.

The growing momentum in SIPs is another attestation of sustained belief among investors. SIP contributions grew consistently over the previous five months, reaching an all-time high of ₹17,073 crore in November. In 2023 so far, inflows through SIPs, at ₹1.7 trillion, have already surpassed the entire inflows through this route in 2022.

Further, SIPs’ AUM recorded a 36.2% year-on-year growth in November, while 31.1 million new SIP accounts have been registered in the year so far. The monthly average of nearly 3 million was sharply up from 2.2 million in 2022. “Over the years investors have seen various market cycles and possibly have recognized the importance of staying invested and using a systematic approach to investing rather than trying to time the market," said Ankit Agarwal, fund manager at UTI Asset Management