The mutual fund industry in India has been on an impressive growth trajectory in 2024, with assets under management (AUM) rising by Rs 17 lakh crore to reach a record-high Rs 68 lakh crore by November-end. This marks a significant 33% growth compared to the Rs 50.78 lakh crore at the end of 2023, a much higher rise than the previous year's 27% growth. The industry's growth in 2024 has been driven by strong investor participation, buoyed by the equity markets' performance, economic growth, and increasing penetration among retail investors.
According to data from the Association of Mutual Fund Industry (Amfi), the total net inflows in 2024 (till November) amounted to Rs 9.14 lakh crore, a substantial increase from last year's Rs 2.74 lakh crore. Of this, Rs 3.53 lakh crore flowed into equity-oriented schemes, Rs 1.44 lakh crore into hybrid schemes, and around Rs 2.88 lakh crore into debt schemes. Notably, equity funds, particularly through Systematic Investment Plans (SIPs), have been the biggest contributors, as SIPs alone accounted for Rs 2.4 lakh crore in 2024.
The continued popularity of SIPs reflects a shift towards disciplined, long-term investing. Monthly SIP contributions consistently exceeded the Rs 25,000-crore mark in October and November, underscoring their growing appeal among investors seeking steady returns with lower risk. This trend is further bolstered by the structural shift towards equity markets, as evidenced by the sustained net inflows into equity schemes, which have been positive every month since March 2021.
The year 2024 also marked the 12th consecutive yearly rise in mutual fund AUM, continuing a trend that began after a dip in the two preceding years. Over the past four years, the industry has added a remarkable Rs 30 lakh crore to its asset base. This growth reflects not only the increasing financialisation of Indian households but also a growing awareness among retail investors about the benefits of mutual fund investments.
Ganesh Mohan, CEO of Bajaj Finserv AMC, noted that the expansion of the Indian economy and rising financial literacy have played a key role in the industry’s growth, with more retail investors turning to equity markets and mutual funds for better returns and convenience. He added that the trend of financialisation, coupled with investors' desire for higher returns at lower costs, is set to keep the mutual fund industry on an upward path in the coming years.
As for the performance of the equity markets, the Nifty 50 and BSE Sensex indices rose by 8.5% and 8%, respectively, in 2024, further boosting investor sentiment and contributing to the growth in mutual fund assets. The momentum is expected to continue into 2025, with experts predicting more inflows as retail participation continues to rise, and more investors turn to equity funds and SIPs as a way to build wealth over the long term.
Overall, the mutual fund industry in 2024 has demonstrated remarkable resilience and growth, and with strong investor participation and positive market dynamics, the outlook for the sector remains bright heading into 2025.
