October 2017: Another month, another good month for MFs

October continues to be a good month for the mutual fund industry. Asset under management (AUM) of the industry has increased by Rs. 51,148 crore in the month of October 2017, showed a data released by the Association of Mutual funds of India (AMFI). The figures for October last year was Rs. 32,334 crore. Therefore, on yearly basis, we saw a jump of 58 per cent. Such an increase has helped total AUM of the industry to reach at Rs. 21.41 lakh crore at the end of October 2017. Out of this, funds dedicated to only equity forms 30 per cent and rest is shared by debt funds or funds such as balanced funds that invest in both equity and debt.

Year till date (April to October), the mutual fund industry has added Rs. 2,53,149 crore under its belt. Nevertheless, the increase is lower than the last year same period. During April to October 2016, total AUM added was Rs. 2,66,898 crore.One of the reasons for such lower addition in AUM compared to last year may be the lower mark to market gains during the April to October 2017. The broader markets during April to October 2017 increased by 14.2 per cent compared to 16.67 per cent for the same year last year.

As equity market continues with its dream run, mutual funds are also witnessing historical inflows. We believe that the shift in the behaviour of retail investors, who are channelizing their savings to mutual funds, is making the difference. Indians saves a lot, earlier this money was invested in physical assets such as gold and real estate, but are now being diverted towards mutual funds.