The mutual fund industry saw its asset base rise to an all-time high of Rs 27.85 trillion at the end of January, on the back of inflows in equity and debt-oriented schemes including liquid funds.
The 44-player industry logged an assets under management (AUM) of Rs 26.54 trillion at the end of December, compared with Rs 27.85 trillion by January-end, representing a growth of 5 per cent, according to data from the Association of Mutual Funds in India (Amfi).
At the end of January 2019, the asset base of the mutual fund industry had stood at Rs 23.37 trillion.
Mutual fund houses witnessed an overall inflow of Rs 1.2 trillion last month as compared to an outflow of Rs 61,810 crore in December 2019.
Fund managers attributed growth in the asset base to strong inflows of around Rs 1.09 trillion in debt-oriented schemes.
Among debt-oriented schemes, liquid funds, with investments in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon, received flows worth about Rs 59,683 crore, the highest among the fixed-income segment last month.
In addition, overnight funds, invest in securities with a maturity of one day, received flows worth about Rs 22,652 crore.
The open-ended equity and equity-linked saving schemes witnessed an infusion of Rs 7,877 crore, while there was an outflow of Rs 330 crore in close-ended equity plans, taking total equity inflows to Rs 7,547 crore last month. In December, net inflow in such schemes stood at Rs 4,432 crore.
"Mutual fund industry's AAUMs (average assets under management) stood at an all-time high of Rs 28.18 trillionin January, driven by positive flows in all categories of open-ended schemes and growing retail monthly Systematic Investment Plan (SIP)," Amfi Chief Executive Officer N S Venkatesh said.
He added that the SIP's monthly contribution at an all-time high of Rs 8,532 crore AUM in January and its total AUM of Rs 3.25 trillionis a recognition of the retail investors' acceptance of mutual funds as a long-term wealth creation avenue, amid market volatility.
Besides, gold exchange-traded funds saw an inflow of over Rs 202 crore after witnessing an inflow of Rs 7 crore in the preceding month. Prior to that, the safe-heaven asset saw an infusion of Rs 31.45 crore in October, Rs 44 crore in September and Rs 145 crore in August.
Sundeep Sikka, executive director and CEO, Nippon Life India Asset Management said, "With the Union Budget 2020 and subsequent RBI policy leading several structural changes, we will continue to stay optimistic on the market outlook."
He also added that the retail investors may continue investing in the markets through SIPs, while staying balanced in their investing approach between different asset classes.
Venkatesh said, "We expect this positive growth momentum in mutual fund AUMs to continue, driven by growth-oriented Budget and the RBI's (Reserve Bank of India) stance on continuing benign interest rate cycle, resulting in 15-20 per cent growth for the mutual fund industry this fiscal."
He further said the government's decision to withdraw exemptions in the new tax regime will not impact flows into ELSS schemes.
People who fall in the higher end of the tax bracket would continue to invest in ELSS and, so, demand may not subsidise, he added.