Participation of retail investors increased in mutual funds – know the main reason behind this


Mumbai  : Investors’ assets (AUM) with mutual funds will double (Rs 100 lakh crore) by 2030. The biggest reason for this is that the participation of retail and rich investors in mutual funds will increase to 68 percent by 2029-30, which was 45 percent in 2016. This will boost the stock market because 56 percent of the money in mutual funds goes into equity.

According to a report, the participation of retail and rich investors (HNI) will reach 60 percent in the financial year 2023-24 ending on March 31. According to the report, the AUM of mutual funds will double to Rs 50 lakh crore in just four years by December 2023. It took 5 years to reach AUM from 12 lakh crore to 25 lakh crore. It will double once again in the next 6 years.

Market experts said that the penetration of mutual funds in the country is only 15 percent, while the global average is 74 percent. Even if it wants to reach half of this, Indian mutual funds will have to show 22 percent growth. Equity AUM in the mutual fund industry reached 56 per cent by last December, which was 30 per cent till 2015-16.

The share of ETFs along with equity in the total AUM of mutual funds has reached 70 percent. Equity AUM increased by 47 per cent in January this year. In this, only 13 percent contribution was from net investment in equity funds. The remaining 34 per cent contribution came from mark-to-market gains on equity investments. According to mutual fund organization AMFI, the AUM of mutual funds has increased by an average of 20 percent every year between 2013-14 to 2023-24. During the same period, equity AUM has increased by 32 percent annually.


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