"Mutual fund industry has been among the biggest beneficiaries of demonetisation that resulted in low interest rates on bank deposits. The move also helped investors to shift from physical assets to financial savings. Years of perseverance by industry players and the regulator seems to have paid off, finally.
"The fiscal year may go down in history as the one when the proverbial change in savings habits of Indian households happened," Bajaj Capital CEO Rahul Parikh said.
According to the data, investors have poured in a net of Rs 51,148 crore in MF schemes last month as compared to a pull out of Rs 16,604 crore in September.
The latest inflow has been mainly driven by contributions from equity, equity linked saving schemes and income funds.
Equity and equity linked schemes attracted Rs 16,000 crore and income funds received Rs 40,845 crore. Besides, close to Rs 6,000 crore was invested in balanced funds.
In contrast, gold ETFs continued to see net outflow of Rs 34 crore.
The inflow has also helped in pushing the assets under management of the 42 player mutual fund industry to an all time high of Rs 21.41 lakh crore at the end of October from Rs 20.40 lakh crore in September-end.
"We are particularly excited about the higher retail participation that has contributed to this growth," Sharekhan Director Investment Solutions- Stefan Groening said.
Going ahead, Parikh said that digital investment platforms are going to be a big driver for the industry.
"These platforms are the best bet to attract the young salaried generation of millennial — who otherwise are humongous spenders on gadgets, cars and bikes — and inculcate in them the virtues of saving and investing," he added.