Equity mutual funds have caught a fancy with retail investors. The latest data released by the Association of Mutual Funds in India shows that individual investors are increasingly choosing equity schemes over other alternatives.
Assets managed by the Indian mutual fund industry have spiked from ₹37.77 trillion in July 2022 to ₹46.28 trillion in July 2023, reflecting a jump of 22.53 percent in the past one year.
Equity schemes on a rise
An interesting trend that has come to fore is that the proportionate share of equity oriented-schemes and those of ETF schemes is growing rapidly, while the debt schemes now hold a lower share in the mutual fund landscape.
Now, equity-oriented schemes hold 52 percent of industry assets in July 2023, while the corresponding figure for July 2022 was 50.1 percent.
Spike in individual investors’ stake
Individual investors now hold a higher share of total industry assets — 57.5 percent in July 2023 as compared with 55.9 percent in July 2022. This clearly indicates the gradual increase in individual investors’ footprint vis-à-vis institutions in the overall mutual fund universe.
Also, equity-oriented schemes derived 89 percent of their assets from individual investors, whereas the corresponding data for July 2022 was 88 percent.
Institutional investors account for 42.5 percent of the assets, of which corporations are 95 percent. The remainder of them are institutional investors and banks.
These investors dominate liquid and money market schemes (88%), debt schemes (59%) and ETFs, FOFs (90%).
Individual investors primarily hold equity-oriented schemes while institutions hold liquid, debt-oriented schemes and ETFs, FOFs.
81 percent of individual investor assets are held in equity-oriented schemes whereas 59 percent of institutional assets are held in liquid/ money market schemes and debt-oriented schemes.
In July 2023, small-cap equity mutual funds garnered the largest influx of ₹4,171.44 crore, trailed by multi-cap funds securing ₹2,500.47 crore. Conversely, there was a noteworthy outflow of ₹1,880 crore from large-cap funds, with focused funds experiencing an outflow of ₹1,066.72 crore.