Rs 8.74 lakh crore: The unbelievable 31% surge in passive mutual fund assets within a year

The year gone by witnessed a noteworthy shift in the performance dynamics between actively and passively managed mutual fund schemes. Buckle up as we take you through the journey of how passive investments emerged victorious, weaving through statistics and insights that unknot the fascinating trends of the mutual fund industry.

Riding the Index Wave

The opening chapter delves into the standout performance of passive mutual fund schemes, showcasing how they outpaced their actively managed counterparts across equity, hybrid, debt, and solution-oriented schemes. Explore the reasons behind this success, mainly attributed to the record-breaking spree of popular indices.

Assets Under Management

The staggering 31% increase in assets under management (AUM) for passively managed mutual fund schemes, soared to Rs 8.74 lakh crore last month from Rs 6.65 lakh crore in January. Delve into the contributing factors, including new fund offers and heightened inflows into index funds.

Passive Funds Command 21% of AUM

Explore the changing dynamics as passive funds carve out a significant 21% share of the overall AUM, standing at Rs 42.04 lakh crore (excluding passive funds) as of December-end. Analyse this shift using data from the Association of Mutual Funds in India.

Actively Managed Funds

Despite facing challenges such as outflows and weak performance in debt funds, actively managed funds witnessed a notable 28% increase in AUM, reaching Rs 41.74 lakh crore last year. Understand the nuances of this growth against the backdrop of record collections through new fund offers.

Index Funds Take the Lead

Experiencing a remarkable 49% gain in December, totalling Rs 2 lakh crore against Rs 1.34 lakh crore in January. Uncover the reasons behind this surge, including higher inflows and the launch of new funds, with the number of index funds increasing from 152 to 196 in the last year.

ETFs and Gold Shine Bright

Examine the impressive gains in Exchange Traded Funds (ETFs), recording a 27% surge to Rs 6.23 lakh crore in the last year. Despite market fluctuations, gold ETFs showcased a 25% increase in AUM, reaching Rs 27,362 crore.

The Rise of Overseas Investments

Explore the global ambitions of mutual fund investors as fund of fund investing overseas increased by 9%, totalling Rs 24,064 crore. Uncover the challenges posed by SEBI’s directive in January 2022, limiting fresh subscriptions in schemes investing in overseas stocks.

Conclusion

In this blog journey, we’ve navigated the seas of the mutual fund industry, the dominance of passive investments, the resilience of actively managed funds, and the global ambitions of investors.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.