The Indian mutual fund industry has shown remarkable resilience in September 2024, despite a slight dip in equity mutual fund inflows. Equity mutual fund inflows fell by 10%, but the industry’s overall growth trajectory was buoyed by a continued surge in Systematic Investment Plan (SIP) contributions. This period highlighted the increasing confidence of domestic investors in the long-term potential of India’s capital markets, alongside a steady rise in investor participation.
Record SIP Contributions
One of the most significant highlights from the September 2024 data is the sharp increase in SIP contributions, which rose by 4% year-on-year (YoY), reaching an all-time high of ₹24,508 crore. This represents a 52% YoY growth, underscoring the growing popularity of SIPs as a means to invest in mutual funds. On a month-on-month (MoM) basis, SIP contributions grew by 4%, setting a new peak.
The continued rise in SIP contributions is a clear indicator of the strong faith that Indian investors have in the country’s economic fundamentals. Even amid market volatility, retail investors are increasingly choosing SIPs as a disciplined approach to investing in equities and hybrid schemes. This has allowed them to ride out short-term market fluctuations and benefit from the long-term compounding effects of their investments.
New SIP Registrations Soar
In September, new SIP registrations reached an impressive 6.6 million, reinforcing the widespread adoption of SIPs across various investor segments. The number of new investors in the mutual fund space is growing rapidly, with more individuals understanding the value of consistent, long-term investments through SIPs.
These trends are aligned with the broader growth in the Indian mutual fund industry’s assets under management (AUM), which hit a record ₹68 lakh crore in September 2024. This surge in AUM, driven largely by retail investors, reflects both the growing depth of the market and the increasing trust investors have in mutual funds as a safe and efficient investment vehicle.
Unprecedented Growth in Folio Count and Investor Base
Mutual fund folios, which refer to individual accounts or investment records, reached an all-time high of 210.5 million in September. Notably, the retail mutual fund folios, encompassing equity, hybrid, and solution-oriented schemes, also touched a new record of 168.2 million. This represents a healthy rise from the previous month’s tally of 163.6 million folios.
This surge in the number of folios is a clear sign of retail investors embracing mutual funds for long-term wealth creation. Retail investors have increasingly diversified their portfolios, opting for equity, hybrid, and solution-oriented schemes, contributing significantly to the overall growth of the mutual fund industry.
Retail AUM at an All-Time High
The retail AUM, which includes equity, hybrid, and solution-oriented schemes, stood at a robust ₹40.44 lakh crore in September 2024. This figure reflects the growing allocation of retail investors into mutual funds as a preferred investment class, with the Indian investor base increasingly looking to mutual funds for their long-term financial goals. The record retail AUM also underscores the continued shift of retail investors towards professional fund management and structured investment products.
Industry Outlook: Resilience Amidst Market Fluctuations
Despite the slight decline in equity mutual fund inflows, the Indian mutual fund industry has shown remarkable resilience, driven primarily by domestic retail investors. The industry’s strong growth in SIP contributions, the record-breaking folio count, and the all-time high retail AUM all point toward a healthy and expanding investor base.
India’s mutual fund industry has become a key stabilising force for capital markets, and the country’s economy continues to inspire investor confidence. Mutual fund houses are increasingly focused on providing transparent and accessible investment products while maintaining high levels of operational excellence.
Conclusion
September 2024 was a historic month for the Indian mutual fund industry, with SIP contributions hitting new records and the total industry AUM growing significantly. The record-breaking growth in SIPs, folios, and retail AUM speaks volumes about the resilience of Indian investors and their growing confidence in mutual funds. As the country continues to progress economically, it’s clear that mutual funds will remain a key pillar for retail investors seeking long-term wealth creation.
The mutual fund industry’s commitment to transparency, excellence, and adapting to the evolving needs of investors will be crucial in maintaining this momentum. With SIPs becoming an increasingly popular investment tool, the future of mutual funds in India looks brighter than ever.
