Mutual Fund

The mutual fund industry observed highest increase in investment coming from funds raised through new fund offerings

The mutual fund industry AUM has hit a record high of Rs 66.70 lakh crore in August. According to the Association of Mutual Funds in India (AMFI), the AUM increased by 2.7% or Rs 1.74 lakh crore from Rs 64.97 lakh crore in July. 

Highest Investment in August

The sectoral/thematic category observed the highest increase in investments in August, with a significant portion of these coming from funds raised through new fund offerings (NFOs). This trend was similar to that of July, with over 50% of the investments in the sectoral/thematic group originating from funds raised through the NFOs introduced in August.

Income & Debt Schemes Assets

The income/debt-oriented schemes assets hit a record high in August, reaching Rs 16 lakh crore. This increase was driven by a surplus of liquidity in the banking sector, caused by high government spending, which led to government bond yields hitting their lowest point in two years.

The inflow figures stayed positive for the consecutive second month, reaching Rs 45,169 crore. Debt funds were chosen as the top option by international investors looking for steadiness despite worries about expansion.

AUM in Passive Funds

Among the passive funds, the AUM reached an all-time peak of Rs 11.21 lakh crore, which accounted for roughly 17% of the total industry AUM. Additionally, other Exchange-Traded Funds (ETFs) experienced the largest inflows of Rs 10,094 crore. Gold ETFs saw the most significant inflows ever, reaching Rs 1,611 crore in August, due to a decrease in customs duties.

However, the monthly note of Association of Mutual Funds in India (AMFI) also stated that “Equity AUM increased by Rs 75,055 crore led by MTM gains and strong inflows. Strong signals of an imminent rate cut by the US Fed in the near future, coupled by continued buying by domestic institutional investors (DIIs) and foreign institutional investors (FIIs) helped the domestic equities to touch all-time high during the month.”

Assets in Hybrid Category

The assets in the hybrid category reached a new peak of Rs 8.61 lakh crore. The total inflows for the month amounted to Rs 10,005 crore. Within the entire hybrid mutual fund categories, dynamic and multi-asset allocation funds were responsible for nearly 60% of the inflows in the category. 

“The industry assets rose to a new high, with an asset base of Rs.66.70 lakh crore at the end of August 2024. The positive inflow, along with folio count surpassing 20 crores, reflect investor confidence and a growing appreciation for mutual funds as a preferred investment avenue. The steadily increasing SIP contribution of Rs. 23,547 crores in August 2024 highlights the shifting investor sentiment towards disciplined and long-term wealth accumulation,” said Venkat N Chalasani, Chief Executive of AMFI.