 "Inflows into equity mutual funds (MFs) continued their strong momentum in July, despite the market volatility triggered by the Union Budget. Active MF schemes received Rs 37,113 crore, the second-highest monthly inflows ever, after attracting a recor")
Illustration: Binay Sinha
The mutual fund (MF) investor base is set to surpass the 50-million unique investor milestone in September, with net additions expected to exceed 10 million in just 12 months, driven by sustained buoyancy in the equity market and a surge in new fund offerings (NFOs).
Previously, it took the industry 21 months to add 10 million investors, while growing from 20 million to 40 million took over 26 months.
The unique investor count is tracked using the number of permanent account numbers registered with MF schemes.
According to MF executives, the surge in new investors is underpinned by the growing appeal of equity investments.
“Today, investors are turning to market-linked investments like MFs to participate in the country’s growth, where there are pockets of opportunity across the economy and sectors,” said D P Singh, deputy managing director and joint chief executive officer (CEO) at SBI MF.
“As long-term conviction in India’s growth story deepens across the country and demographics, we expect a strong influx of investors into the capital markets. MFs and dematerialised accounts will see simultaneous growth,” said Swarup Anand Mohanty, vice-chairman and CEO of Mirae Asset Investment Managers (India).
The two industry leaders believe the growing interest in equities and systematic investment plans (SIPs) will likely double the investor count to 100 million in the next three to four years. The industry has set a target of 100 million investors by 2030, aiming to exceed Rs 100 trillion in total assets under management.
While retail interest in equities has been steadily growing since the pandemic, the recent uptick in investor numbers is attributed to the strong market rally, the robust performance of equity schemes, and a wave of NFOs in popular categories, according to experts.
The benchmark indices, the National Stock Exchange Nifty 50 and the S&P BSE Sensex, have risen around 30 per cent over the past year. During this period, fund houses have launched numerous equity NFOs, with activity especially picking up in the last four months. MFs launched 21 active equity schemes from May to August, collectively raising Rs 48,735 crore.
Groww, the largest direct plan distributor, said its SIP investor base has trebled over the past two years, both in metro and non-metro locations.
“The states with the highest growth were Maharashtra, Uttar Pradesh, West Bengal, Bihar, Karnataka, and Delhi,” Groww said, noting that around 80 per cent of investments on its platform come from beyond the top six cities.
Singh pointed to other factors contributing to the growing investor base.
“There are several levers for this growth — positive economic sentiment, technological enablers in banking, financial services and insurance, and awareness campaigns by the industry,” he said.
The industry’s campaign around SIPs has been one of the key factors behind MFs emerging as a prominent equity investment option. The growing popularity of SIPs is reflected in the data.
The number of active SIP accounts is nearing the 100 million milestone. In the first eight months of the current calendar year (CY), MFs added 19.7 million accounts, compared to 15.1 million for the entirety of CY 2023.
First Published: Sep 23 2024 | 7:40 PM IST
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