 "A break-tape stumble can't halt mutual fund AUM sprint to finish")
Mutual funds (MFs) achieved nearly 40 per cent growth in assets under management (AUM) in calendar year (CY) 2024, despite a lacklustre fourth quarter. The AUM growth rate of 39.4 per cent is the highest recorded in at least the last decade.
Recent data for the December quarter shows that MFs collectively managed Rs 68.6 trillion, compared to Rs 49.2 trillion in the same quarter the previous year, according to the Association of Mutual Funds in India.
AUM growth is influenced by two factors: market performance and net inflows. The mark-to-market impact on AUM has increased over time, as the share of equity and hybrid MF schemes has trended upwards. Active equity funds alone reached an AUM of Rs 30 trillion by November 2024.
The effect of equity market performance is evident in the quarterly AUM growth figures over recent years. In the first three quarters of CY 2024, during a market rally, the AUM showed robust sequential growth across all three-month periods.
The industry saw quarter-on-quarter AUM growth of 10 per cent, 9 per cent, and 12 per cent, respectively, in the first three quarters. However, following the market correction in the final quarter, average AUM growth slowed to just 3.6 per cent.
Although equity market performance has been a primary driver, AUM growth was also supported by substantial inflows into equity schemes. By November, investors had contributed a record Rs 3.5 trillion to active equity schemes in 2024, more than doubling the Rs 1.6 trillion recorded in 2023. Systematic investment plans alone accounted for nearly Rs 2 trillion of the total equity fund inflows.
Among the larger fund houses (top 20 by AUM), Quant MF posted the highest year-on-year growth in AUM for the December quarter, increasing by 138 per cent. Motilal Oswal MF also more than doubled its AUM. Among the top 10 fund houses, Nippon India MF grew the fastest at 51 per cent. SBI, ICICI Prudential, and HDFC remain the top three fund houses.
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