As they say, the proof of the pudding is in the eating. Upon examining the investing data of mutual funds shows the breakneck pace with which retail investors’ exposure to equity is growing. The total assets under management have also witnessed a rapid increase.
Total assets managed by the mutual fund industry rose from ₹39.53 trillion in August 2022 to ₹46.94 trillion in Aug 2023 (see bar chart below), indicating an 18.72 percent increase, shows the data revealed by Association of Mutual Funds in India (AMFI).
The SIP contribution also reached an all-time high of ₹15,813 crore while the SIP AUM stood at ₹8,47,130.87 in August.
Equity mutual funds saw an uptick to 52.7 percent on August 23 against 50.9 percent a year ago. At the same time, the proportionate share of debt schemes has reduced to 19.2 percent in Aug 2023 against 19.8 percent the same month last year.
Additionally, ETF market share spiked from 12.5 percent to 12.7 percent in one year.
Another interesting trend that has come to light is that individual investors now hold a higher share of industry assets i.e., 57.8 percent vis-a-vis 56.6 percent last year.
At the same time, institutional investors account for 42.2 percent of the assets of which corporates are 95 percent. The remaining institutional investors are Indian and foreign institutions and banks.
Retail investors’ pie
The dominance of individual investors is further underscored by a metric that shows that equity-oriented schemes derive 89 percent of their assets from individual investors (retail & HNIs). The figure was, incidentally, the same last year.
Institutional investors dominate liquid and money market schemes (88 percent), debt schemes (59%) and ETFs, FOFs (90%).
Additionally, individual investors primarily hold their assets in equity schemes. Sample this: 81 percent of individual investor assets are held in equity-oriented schemes, 14 percent in debt, 3 percent in liquid/ money market and 2 percent in ETFs/fund of funds, shows the Industry Trends by AMFI.
On the contrary, institution investors hold 14 percent of their assets in equity, 27 percent each in debt and ETFs, while 32 percent in liquid/ money market schemes.
Overall, the value of assets held by individual investors in mutual funds rose from ₹22.37 lakh crore in Aug 2022 to ₹27.15 lakh crore in Aug 2023, an increase of 21.39 percent.
The value of institutional assets has risen from ₹17.17 lakh crore in Aug 2022 to ₹19.79 lakh crore in Aug 2023, reflecting an increase of 15.25 percent.
