The Indian mutual fund space has witnessed an expansion amid the pandemic, with top fund houses having registered growth in the range of 8-16 per cent this year in their assets under management (AUM).
The AUM of SBI Mutual Fund, at the end of July, was over Rs 5.53 lakh crore, or 15.5 per cent higher than over Rs 4.79 lakh crore in December 2020.
Data from primemfdatabase.com showed that the AUMs of the other major players HDFC Mutual Fund, ICICI Prudential Mutual Fund, Kotak Mahindra Mutual Fund, and Nippon India Mutual Fund stood at around Rs 4,37,093 crore, Rs 4,34,180 crore, Rs 2,58,416 crore and Rs 2,57,544 crore, respectively, higher by 8.5 per cent, 9.4 per cent, 13.4 per cent, and 16.3 per cent from their respective AUMs in December 2020.
Backed by a low base, smaller fund houses have also witnessed a higher growth rate in their AUMs during the period.
In tandem with the rise in the equity market, small players made giant strides during the year.
Equity schemes of fund houses like Quant Mutual Fund, ITI Mutual Fund, and PPFAS Mutual Fund have been among the best performing schemes so far in the year.
The assets under management of Quant witnessed over five-fold rise during January-July 2021. Its AUM in December 2020 stood at Rs 521 crore and by July-end it reached Rs 2,842 crore, showed data from primemfdatabase.com.
The AUM of ITI Mutual Fund rose over 100 per cent to Rs 1,879 crore and PPFAS Mutual Fund’s AUM also nearly doubled to Rs 14,318 crore.
Prime Database Group Managing Director Pranav Haldea said that the higher growth rate of AUM of smaller fund houses is due to low base effect along with their identification of specialised offerings.
“One reason is low base effect, and second I think smaller fund houses have done a commendable job in terms of identifying niches where they have specialised,” Haldea told .
He further said that performance of these mutual funds along with the incumbent giants will continue to be robust.
“The sort of AUM growth which you have seen in the mutual fund industry in the five odd years, the AUM now stands at close to 35-36 lakh crores. So, the growth of these smaller fund houses will also extract a fair share of that growth,” he said.
Haldea told that the growth will continue because there will be more channelising of retail savings into mutual funds going forward.
More and more retail investors in the last one and half years have come to the capital market as various other kinds of investment markets are not providing the returns that they are used to.
“So, retail investors are increasingly looking at equity and the markets obviously are supportive, and the markets are doing really well,” he said.
Association of Mutual Funds in India (AMFI) Chief Executive N.S. Venkatesh said: “Mutual funds have emerged as the preferred savings-cum-investment avenue over the last few years, and the pandemic has actually triggered this shift towards mutual funds in a more pronounced way.”
This shift will continue in 2021 and beyond, accentuated by SEBI-driven initiatives towards transparency and disclosures, he said.