India's mutual fund inflows surge 125% in 2023: ICRA Analytics
Mutual Funds registered a 125% increase in net inflows throughout 2023, as per ICRA Analytics. The net inflows skyrocketed to Rs. 25,616 crore in November 2023, jumping from Rs. 11,373 crore in January of the same year. More and more investors are seeing the potential of mutual funds, driving this growth. Ashwini Kumar, Head-Market Data at ICRA Analytics, anticipates continued inflows in the new year, influenced by interest rate trends in India and stable global crude oil prices.
AUM nears Rs. 50 lakh crore mark
The assets under management (AUM) for India's mutual fund industry reached nearly Rs. 49.05 lakh crore by November 30, 2023, a substantial increase from Rs. 39.62 lakh crore as of January 31, 2023. ICRA Analytics revealed that the AUM is approaching the Rs. 50 lakh crore milestone and is well on its way to achieving the ambitious goal of Rs. 100 lakh crore in the coming years.
Rs. 250/month SIPs coming soon
The Securities and Exchange Board of India is collaborating with mutual fund companies to explore options for making Systematic Investment Plans (SIPs) as low as Rs. 250 per month feasible. The industry witnessed a surge in SIPs, with the number of accounts reaching a record-breaking 7.44 crore in November, up from 7.30 crore in October. The SIP AUM also saw a sharp increase, reaching Rs. 9.31 lakh crore in November 2023 compared to Rs. 8.60 lakh crore in October 2023.
Key factors driving higher inflows into mutual funds in 2024
"The fundamentals of the Indian economy remain intact, which has insulated the domestic economy from global shocks," said Kumar. Continuation of the government's reform agenda, prudent balancing of the fiscal and monetary policy, and end of the global monetary policy tightening cycle are driving inflows into mutual funds. An interest rate cut by the Reserve Bank of India (RBI), if inflation remains under control, will also boost the inflows in 2024, Kumar noted.
