MF AUM surges to 29% of bank deposits on market rally, strong inflows | Mutual Fund – Top Stories
MF AUM surges to 29% of bank deposits on market rally, strong inflows | Mutual Fund – Top Stories
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Mutual funds (MFs), an investment product largely limited to a few urban pockets of India until four years back, have emerged as a key competitor to traditional saving and investment avenues in recent times.
The Reserve Bank of India (RBI) Governor Shaktikanta Das recently highlighted this fact, saying that households were allocating a higher portion of their savings to mutual funds, insurance funds, and pension funds.
Data also points to a similar trend. MFs’ assets under management (AUM) have grown nearly threefold in the past four years, while bank deposits went up 1.6 times. As a result, the MF AUM is now equivalent to 29 per cent of bank deposits, compared to just 16 per cent in March 2020.
Although the MF AUM growth owes a lot to the equity market rally, the inflows have also seen a spike in recent years as strong performances of equity MF schemes and the growing popularity of systematic investment plans (SIPs) as an investment avenue boosted the MF investor base.
In the financial years ending March 2023 and March 2022, MFs had cornered over 6 per cent of household savings. In FY21, this figure had been a mere 1.3 per cent, according to RBI data.
First Published: Jul 22 2024 | 6:05 PM IST
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