India's mutual fund industry achieved a historic milestone in November, with its total assets under management (AUM) swelling to a staggering Rs 80.80 lakh crore. This marks a robust year-on-year growth of 18.7%, climbing from Rs 68.08 lakh crore recorded in the same month last year, as per the latest data from Franklin Templeton's Mutual Fund Industry Dashboard.
SIP Revolution and Expanding Investor Base
The systematic investment plan (SIP) engine continues to power the industry's growth. Monthly SIP contributions surged to Rs 29,445 crore in November, a 16% increase from the previous year. This figure represents a doubling of SIP flows in less than three years, underlining the method's popularity. The average SIP ticket size has also grown to Rs 2,939 per month from Rs 2,476 annually, indicating that higher-income segments are increasingly adopting this route.
Over the past twelve months, aggregate SIP flows reached an impressive Rs 3.30 lakh crore, up 27% from Rs 2.59 lakh crore in the comparable period. The industry also crossed 5.84 crore unique investor accounts in November, adding a remarkable 66 lakh new investors over the last year. This expansion is geographically broad-based, with new account registrations rising to 57.14 lakh from 49.47 lakh a year ago, signalling reach beyond major metros.
Equity Dominance and Structural Shifts
Equity-oriented funds remain the cornerstone of the industry, commanding 60.2% of the total AUM, which translates to roughly Rs 58.26 lakh crore. Within this segment, SIPs have grown more prominent, now constituting 28.4% of total equity AUM, up from 27.5% a year ago. Notably, equity funds have enjoyed 57 consecutive months of net inflows, nearly five years of unwavering positive momentum.
A significant structural shift is underway towards passive investing. Passive fund investments grew 24.3% year-on-year to Rs 13.72 lakh crore, increasing their share of total AUM from 16% to 17%. This mirrors a global trend favouring low-cost, index-based strategies.
Deepening Penetration and Domestic Strength
The growth story is increasingly being written beyond the top cities. Contributions from beyond the top 15 (B30) cities now account for 35% of the industry's AUM, a significant jump from 26% in September 2020. States like Haryana and Rajasthan are at the forefront of this expansion, registering growth rates of 23.74% and 22.31%, respectively.
The industry's clout within the broader financial system is strengthening. Mutual fund AUM now represents 33.3% of total bank deposits, up from 31.2% a year ago. Individual investors, encompassing both retail and high-net-worth individuals, hold a 60% share of industry AUM, with their assets growing at a 23% CAGR over the past decade.
The report highlights the industry's reliance on robust domestic capital. While domestic institutional investors poured in net inflows of Rs 7.4 lakh crore in the last 12 months, foreign portfolio investors were net sellers to the tune of Rs 2.9 lakh crore.
The Indian mutual fund industry's record-breaking performance, driven by relentless SIP flows and widening investor participation, underscores a profound transformation in the nation's savings and investment landscape.
