Investing in mutual funds is believed to be a good investment, and often recommended by wealth advisors to be safe for individual investors. By virtue of being managed by the experts, mutual funds offer more stable returns minus volatility vis-a-vis individual stocks. No wonder then the overall asset size of mutual fund universe has been growing at a fast pace month after month.
The latest data released by the Association of Mutual Funds in India (AMFI) reveals that investment by retail investors has jumped significantly in the past one year.
Sample this: The value of assets held by retail investors in mutual funds rose from ₹28.10 lakh crore in Sep 2023 to ₹42.10 lakh crore in Sep 2024, an increase of 49.82 per cent.
Another point worth considering is that most of the fresh investment in mutual fund was done in equity schemes. However incredible it may sound, but the data suggests that a whopping 87 percent of individual investor assets are held in equity-oriented schemes (Industry Trends Sep 2024).
On the other hand, 51 percent of mutual fund assets owned by institutional investors are held in liquid or money market schemes and debt-oriented schemes.
Let us see this data from a different angle. Equity oriented schemes draw 88 percent of their investment from individual investors which include retail as well as HNIs (high net-worth individuals). Institutional investors, on the other hand, dominate liquid and money market schemes (88 per cent), debt oriented schemes (63 per cent) and ETFs, FOFs (89 per cent).
Now the proportionate share of equity-oriented schemes is 61 percent of the industry assets in Sept 2024, up from 54.1 percent in Sept 2023.
Institutional investors
Investment by institutional investors has also spiked significantly in the past one year, AMFI data (Industry Trends for Sep 2024) reveals. The value of institutional assets has also jumped from ₹19.69 lakh crore in Sept 2023 to ₹25.90 lakh crore in Sept 2024, reporting an increase of 31.56 percent.
When it comes to overall assets, institutional investors account for 38.1 percent of the assets of which corporates are 95 percent. The rest are Indian and foreign institutions and banks.
The remaining assets in the mutual fund universe (i.e., 61.9 per cent) are held by individual investors in Sep 2024, as compared to 58.8 per cent in Sept 2023.