The Rs 23-trillion mutual fund industry has seen a slew of changes in the last few years. But, the most heartening one would be the increased retail participation. In FY18, share of individual assets for the first time accounted for more than half of the industry assets, with institutional assets slipping five percentage points to 49 per cent in last fiscal.
Individual folios have surged nearly two-fold to 70.9 million in the last four years. The rising interest from individual investors has tilted the asset mix in favour of equity schemes, which typically offer better profitability to fund houses.
At the end of FY14, the value of debt assets managed by the industry was three times that of equity assets. At the end of FY18, the gap between equity and debt assets has narrowed down to just 20 per cent. Equity assets account for 43 per cent of industry assets. Those fund houses which have managed to tap this shift towards equity schemes, have also seen significant improvement in their bottom-line.
Reliance MF and HDFC MF, which have a retail focus have seen their net profits grow at 14 per cent and 19 per cent CAGR, respectively.