MF industry sees Rs 10,000 crore equity inflows in May
Jun 06 2014 , Mumbai
AMFI expects the industry AUM (assets under management) to double in next 2-3 years largely on higher equity inflows as organization feels the multi-year bull run will see retail participation back in equities with some help from the government.
The assets under management of Indian mutual fund industry rose to Rs 10.11 lakh crore in May from Rs 9.45 lakh crore in April, AMFI said.
The money in equity schemes came mostly from the retail investors and mostly in the second half of May after the election results, AMFI officials said. Still the equity assets in the industry were only Rs 2.32 lakh crore out of total industry assets of Rs 10.11 lakh crore.
Sundeep Sikka, Chairman, AMFI said, “Retail participation in equity schemes has increased significantly in the recent months. Our effort to reach out to the retail segment and locations beyond Tier 2 and Tier 3 towns has started showing results.”
H.N Sinor, chief executive, AMFI said, “With the change in sentiments retail investors have once again started showing interest in mutual fund products. Various initiatives by AMFI at financial literacy are also showing up in terms of greater retail participation and deeper geographic reach.”
The mutual fund industry however also had Rs 7,500 crore outflows in the equity schemes in May reducing net equity inflows to Rs 2,500 crore, but still May inflows were the highest monthly equity inflows in recent years, AMFI said.
“Month of June might be even better,” Sinor said.
“The industry has seen positive equity inflows since November 2013 except for the month of March 2014,” Sinor said.
“Investors confidence is improving, particularly at retail end, retail participation is showing a surge and our meeting with distributor associations from different corners of the country showed that enquiries and conversions are taking place now,” Sinor said.
“Two sets of investors are coming to market now, those who were holding money for some time and those who are into systematic investment plans or SIP,” Sinor added.
New investors are coming to mutual funds as every asset management company is getting new PAN numbers, we will closely look at these data to see how many are from beyond top 15 cities, Sinor said.
“The industry association forwarded its Budget wish list to the finance ministry asking for introduction of mutual fund linked retirement products, higher tax free investment limits for equity linked savings schemes or ELSS, new products with tax incentives to allow retail participation in infrastructure related capital raising,” Sinor said.