From a nearly 2.7 trillion-dollar economy today India is poised to cross the 5trillion-dollar mark by 2025 as per the IMF. Economic and structural reforms are poweringthe momentum and strengthening our growth. From a hard working developing economy we aretoday one of the worlds favourite investment destinations.
India is likely to remain the fastest growing major economy in the world. According tothe IMF's latest estimates India will become the worlds fifth largest economypushing behind France and the UK in 2019 itself. In purchasing power parity (PPP) termsIndia has become the third largest economy behind only US and China. India now contributesmore than 10% to global economic growth.
In this optimistic growth scenario the Mutual Fund Industry has a lot more tocontribute. It is one of the fastest-growing industries in the countrys financialservices sector with 44 AMCs operating currently. The Industrys quarterly AAUM hasseen a growth rate of 6% over last year to touch र: 24.48 lakh crore as of March 31 2019._
In line with rushing aspirations and overall development retail investor participationis on the rise reflecting confidence in the category and an increasing risk appetitedespite high volatility. The total number of retail investor folios increased to 8.24crore as of March 2019 an addition of approx. 1 crore this year. Retail assets was thefastest-growing segment and contributed approx. 58% to the incremental industry assets.Retail participation remained robust having registered 18% YoY growth.
Reliance Nippon Life Asset Management Ltd. (RNAM) has played a major role in theIndustrys overall growth. With a long-term perspective we have been able to deliveron our core strategy and build the franchise further. We continue to focus on:_
Garnering higher share of Retail Assets
Gaining higher share from Beyond Top 30 cities
Expanding our product offerings across various categories
Increasing operating efficiencies
The year gone by was an eventful one. Debt funds were in the news for dramatic outflowof funds due to defaulting of a few large corporate houses. Such defaults triggeredliquidity issues and NBFC crisis resulting in flight to safety. This resulted in debtassets degrowth of 12%._
During the year there have been significant regulatory changes such as a revised slabstructure of expense ratios adoption of full trail structure all commission and expensesto be paid from schemes and beyond top 30 cities incentives allowed only on retailinflows._We are confident that the changes will lower costs for mutual fund investors.This will aid in greater retail participation and help in positioning mutual funds as thepreferred mode of investment as compared to similar financial products.
RNAM continues to deliver on the back of a strong foundation stable management teamprudent risk management practices robust processes highest standards of compliancecutting-edge digital architecture and a customer centric approach despite all thechallenges. We are pleased to share that our Equity Assets including ETFs rose by 13% toर: 1.08 lakh crore. Our folio count grew by 12% to approx. 91 lakhs.
Your Companys strength lies in garnering assets from retail investors andincreasing mutual fund penetration by getting a higher share from small cities and towns.We continue to have the highest Retail AAUM of र: 89911 crore driven by a strong on-groundpresence and robust distribution network. Further our retail assets have grown by approx.र: 16700 crore in the last 12 months the highest in the Industry. Our Retail AAUMcontribution to Total AAUM is amongst the highest in the Industry at 39%.
Volatile markets didnt dampen the sentiment of retail investors and they continueto invest during the year in a structured manner for wealth creation indicative of theirevolving behaviour and maturity. Our annualised Systematic Investment Plan (SIP) book grewby 14% to र: 10300 crore and our SIP count increased by 21% to 31 lakhs. Over 78% of theincremental SIPs have a tenure of over 5 years.
RNAM growth in Beyond Top 30 Cities is a testimony to our perseverance andcommitment towards the inclusive growth of our nation. We continue to be amongst theleaders in this segment which contributed AUM of more than र: 45000 crore. Nearly 20% ofour total assets are sourced from this segment as against 15% for the Industry.
We are immensely happy to share that we have successfully raised र: 27000 crore via twofurther Fund Offers of CPSE ETF with participation across all investor categories. RNAM isthe second-largest ETF player with a market share of approx. 18% in the segment.
Distribution is a critical link between consumers and company. We went a step ahead andcreated a well-diversified distribution model. Ensuring we reach out to every household inIndia we have championed this model to de-risk business and enable us to spread our wingsfurther and wider. Your Company remains well diversified in terms of distribution with nosingle distributor contributing to more than 5% of the total mutual fund AUM. Ourdistributor count went up from 65300 in March 2018 to more than 73400 as of March 2019.
Your Company has been investing in digital assets and has a significant online presenceto capture the business of tech-savvy investors. We are happy to inform you that RNAMpartnered with
Google to launch voice based financial transactions which is a first of its kind inthe Industry. Our investments in the digital ecosystem is yielding results and digitalpurchase transactions including SIP rose to 10.85 lakh in FY19 a growth of 47%.On average RNAM processed one online purchase transaction every 30 seconds. Overone-third of purchase transactions are happening on our Digital Assets and Integrations.
Your Company has a vast pan-India distribution network with a presence in 300locations. We continue to focus on locations beyond the Top 30 cities to expand the marketand enable new investors to join in this wealth creation journey._
AIF is emerging as the next engine of growth. Its flexible structure allows us toexplore different niche investment strategies to generate superior risk adjusted returnsfor investors. Your
Company continues to be at the forefront of innovation and diversified productofferings. This year Reliance AIF launched the Industrys first Commodity Fund andOffshore Real Estate Fund. Reliance AIF has commitments of over र: 2500 crore acrossvarious AIF schemes._
This year we launched UCITS India Fixed Income Fund domiciled out of Dublin. The Fundis expected to target Asian and European investors for both retail and institutionalclients. Additionally we will continue to work closely with Nippon Life Insurance toleverage their global tie-ups for attracting higher flows from international investors. Webelieve this is an opportunity for attracting a higher share of flows into India and ispart of our profitable growth strategy. RNAM is managing and advising AUM of approx. र:8600 crore from offshore business.
Employees are the key pillar for the success of any AMC business and we continue tohave a focused approach towards employee development and engagement. Over 70% of ourleaders are home grown. Your Company has been recognised twice as AON
Best Employer in 2016 and 2018 and has also featured in Indias Best Companies toWork For in 2018 by Great Place to Work. The accolade came in thanks to our high focus onpeople culture and some of the best HR practices.
The unique mutual fund investors in the Industry are still below 2 crore compared toIndias population of over 130 crore. We believe that the Mutual Fund Industry isstill in a nascent stage and has huge opportunity for growth and expansion. Being one ofthe large players in the Industry we will continue investing in growing the market sizeachieving product innovation educating investors increasing our distribution reach andenhancing our customer service infrastructure with a continued focus on profitablegrowth._
Along with you we look forward to being part of an expanding enriching growth storyin the years to come.