Amid bull run, mutual fund assets soared 22% in December quarter

The mutual fund (MF) industry saw a 22 per cent surge in assets under management (AUM) in the December quarter of 2023, marking the second-fastest growth during this period in the past six years.

Data from the Association of Mutual Funds in India shows that the industry’s average AUM for Q4CY23 was Rs 49.2 trillion, up from Rs 40.3 trillion in the same period of CY22.

This growth was driven by a sharp rise in the equity markets and robust inflows into equity schemes. The key benchmark indices, Sensex and Nifty50, saw gains of 18.7 per cent and 20 per cent, respectively, last year. The midcap and smallcap indices outperformed, with their gains more than double that of the Sensex and the Nifty50.
 

Looking back at the October-December period over the past six years, Q4CY21 stands out as the best for the MF industry in terms of growth, with AUM surging 29 per cent but on a lower base.

The industry’s AUM is estimated to have crossed the Rs 50 trillion mark in December 2023. Comparing the average AUM for Q4 in 2022 and 2023, three fund houses — SBI, ICICI Prudential, and HDFC — added over Rs 1 trillion to their AUM in absolute terms. These three are the top fund houses by AUM, each managing over Rs 5 trillion. Among the top 10, Nippon India witnessed the 

most significant growth at 29 per cent, followed by Mirae Asset  (28 per cent), which entered the top 10 list last year.

However, the debt AUM grew by only 9 per cent in the October-December 2023 period. Debt fund yields, which have been attractive since the start of 2023, failed to garner high inflows largely due to changes in debt fund taxation.