Equity mutual funds log Rs 1.7 lakh crore inflow in FY18

New Delhi: Investors pumped in over Rs 1.7 lakh crore in equity-oriented mutual fund (MF) schemes in 2017-18, making it the fourth successive year of net inflows, according to data from the Association of Mutual Funds in India (Amfi).

Strong inflows have pushed the asset base of equity MFs by 38 per cent to Rs 7.5 lakh crore during the period under review, the data showed.

The impressive inflow can be attributed to investor awareness campaign by the industry, role played by MF distribution platforms, demonetisation effect and strong retail participation from retail investors, especially from smaller towns, Harsh Jain COO at Groww, an online MF investment platform, said.

"Besides, investors are now shifting from traditional asset classes such as real estate and gold to financial asset class," he added.

Moreover, a sharp rise in systematic investment plans (SIPs) promoted more sustainable growth for the industry as more people moved away from the concept of large lump sum investments, said Jain.

According to Amfi data, equity funds, which also include equity-linked saving schemes (ELSS), saw net inflows of Rs 1,71,069 crore in 2017-18, much higher than Rs 70,3674 crore infusion in the preceding fiscal.

These funds had seen net inflows of Rs 74,024 crore and Rs 71,029 crore in 2015-16 and 2014-15, respectively. Prior to that, they had witnessed a withdrawal of Rs 9,269 crore.

The assets under management (AUM) of equity MFs scaled a record high of Rs 7.5 lakh crore at the end of March 2018 from Rs 5.43 lakh crore at March 2017-end.

The industry has seen an overall addition of 32 lakh new investors over the last one year, while the total number of folios grew by 1.05 crore or 26 per cent during the period.

The SIP accounts grew by 70 lakh to 2.05 crore in the fiscal 2018.

Besides, SIP contribution for the industry surged to Rs 6,425 crore in 2017-18, compared to nearly Rs 44,000 crore in the preceding fiscal.

Going ahead, Jain said that lower penetration of mutual funds in India will drive growth along with increasing levels of financial literacy.