MF assets soar 4.5x in past decade, likely to sustain growth in the future

The assets under management (AUM) for the mutual fund (MF) industry has surged nearly 5x in the past decade. At the end of October, the MF industry’s assets stood at Rs 28.2 trillion — its highest ever — compared to Rs 6.5 trillion a decade ago.

The industry hit the Rs 10-trillion AUM mark in May 2014. The next Rs 10 trillion came in just three years in 2017. Since then, the pace of growth has moderated.

Credit crisis in the debt segment, volatility and redemption pressures in the equities segment, and large-scale regulatory changes have weighed on growth in the past few years.

In March, the AUM for the industry had plunged to an 18-month low of Rs 22.3 trillion after the Covid-19 pandemic triggered unprecedented sell-off.

The sharp rebound in the equities market and improvement in flows in the debt segment helped the industry recover lost ground.

In the past decade, the equity-debt mix has largely remained constant, with the former contributing to around 28 per cent of the AUM.

Growing awareness about MF investing, under-penetration, and ease of investing through online platforms will give impetus to growth in the coming decade, say experts.