Mutual Funds' asset base touches all-time high of Rs 25 trn in August-end

Illustration: Binay Sinha
Mutual funds' asset base touched a record Rs 25 trillion in August-end, a surge of 8.41 per cent over the previous month, on the back of robust inflow in liquid funds and strong participation from retail investors.

According to Amfi data, the asset under management (AUM) of the industry, comprising 42 players, was Rs 23.06 trillion at the end of July.

The total asset base of all the fund houses put together was Rs 20.6 trillion in August last year.

The monthly rise in the asset base is mainly due to the industry body's investor awareness campaign and strong participation from retail investors, Amfi chief executive N S Venkatesh said. 

Besides, Systematic Investment Plans (SIPs) continue to be the fancy of retail investors and people continue to invest through the route as it allows investors to invest in small amounts periodically instead of lump sum, he added.

He further said that SIP helps in rupee cost averaging and also in investing in a disciplined manner without worrying about market volatility and timing the market. 

The industry's AUM had crossed the milestone of Rs 10 trillion for the first time in May 2014 and in a short span of about three years, the asset base had increased more than two folds and crossed Rs 20 trillion in August 2017. Now, the industry AUM stood at an all-time high of Rs 25.2 trillion at the end of August.

The surge in the asset base could also be attributed to staggering inflow of Rs 1.75 trillion in mutual fund schemes last month.

This included Rs 1.71 trillion in liquid funds or money market segment which invest in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon.

Besides, equity schemes attracted over Rs 77 billion.

However, income funds saw an outflow of over Rs 65 billion. In addition, gold ETFs continued to see net outflow of Rs 450 million.

The industry, which has been witnessing months of continuous inflow, is set for a healthy growth with the proactive regulation from markets regulator Sebi and favourable macro-economic situation, he said.