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AUM of domestic funds hit a record Rs 20 lakh crore in March on sustained inflow


Though India’s market capitalization has fallen by nearly 8% from the peak, the equity value of the domestic mutual funds or the assets under management (AUM) hit a record Rs 20 lakh crore in March following sustained inflow, according to the NSDL data. This includes equity funds, arbitrage funds, equity exposure in balance funds and exchange traded funds (ETFs).

The local funds had the second largest equity AUM at the end of March 2022 following foreign portfolio investors (FPIs) with an AUM of Rs 47 lakh crore. The share of local mutual funds in the country’s market capitalization rose by 300 basis points to 8% over the past year.

The AUM of local equity funds has nearly doubled over the past two years buoyed by a strong inflow. Indian savers invested over Rs 3 lakh crore in FY22 in equity mutual funds through active and passive schemes.

Agencies

The AUM share of domestic funds in the total institutional equities rose by nearly 160 basis points to 17.4% in March. The total institutional equity AUM at Rs 117.7 lakh crore accounted for nearly half of India’s market capitalization.

With a sustained local inflow, the ratio of the AUMs of the domestic funds and FPIs improved to 82.8% in March from 73% a year ago. The improving ratio implies that the country’s market cap will show lesser volatility in times higher redemption pressure by foreign investors. For instance, despite recent heavy selling by FPIs, Indian equities have shown limited impact.



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