Mutual Funds: Equity funds grew 3.37% in September, total AUM touched Rs 67.09 lakh crore

MF investment: The Mutual fund industry has seen remarkable growth this financial year. According to a recent analysis by Axis Mutual Fund, the mutual fund industry saw a significant increase in total Assets Under Management (AUM) in September 2024, reaching Rs 67,09,259 crore. This represents a 0.58% growth from August and a remarkable 25.64% increase since March 2024. The industry has been on an upward trajectory, with a Compound Annual Growth Rate (CAGR) of 24.19% since March 2021.

Breaking down the AUM by asset class for September, equity funds experienced the most substantial monthly growth at 3.37%, followed by hybrid funds with a growth of 1.64%. On the other hand, the debt category saw a decline of 1.33%, while both exchange traded funds (ETFs) and passive funds posted a growth of 2.21%. This data reflects the dynamic nature of the mutual fund industry and its ability to adapt and grow in changing market conditions. 

Cash assets decreased by 14.87%, signaling a notable decrease in liquidity investments. Equity funds held the largest portion of total assets under management (AUM) at 46%, with debt funds following closely behind at 33%. Hybrid funds accounted for 12% of the total AUM, while ETFs and passive funds made up 9% and 1% respectively.

Equity funds

The equity segment demonstrated impressive year-over-year performance, achieving a substantial growth of 62.93% compared to September 2023. The total equity assets under management (AUM) amounted to Rs 31,15,260 crore, with monthly net sales reaching ₹34,393 crore. Notably, the ratio of net sales to AUM saw an improvement to 1.10% from 0.72% in the previous year.

Sectoral and thematic funds stood out, accounting for 38.54% of the total equity net sales. This was driven by gross sales of Rs 21,917 crore, including Rs 7,842 crore from new fund offers (NFOs).

In September 2024, sectoral and thematic funds collectively saw gross sales of Rs 21,917 crore, with NFOs contributing Rs 7,842 crore to this figure.

Hybrid Funds

The hybrid category is nearing a significant milestone with an AUM nearing Rs 10 lakh crore. In September, it saw net sales of Rs 5,134 crore and has shown a CAGR of 30.35% since March 2021. The multi-asset allocation fund stood out with net sales of Rs 4,070 crore.

The top five categories in this segment contributed to an impressive Rs 687,508 crore, accounting for 74.02% of the total hybrid AUM. Gross sales for the hybrid segment totaled Rs 37,147 crore, with redemptions at Rs 32,013 crore. This resulted in net sales of Rs 5,134 crore, reflecting a growth rate of 0.55% in the segment.

Despite market fluctuations, there continues to be strong interest in hybrid funds from investors seeking balanced risk and return profiles. The strategic allocation of assets across different classes appears to be resonating well with investors, particularly in times of market uncertainty.

Passive investments are also gaining traction, with a total AUM of Rs 2,95,558 crore, marking a 41.54% increase since September 2023.

Debt funds

In September 2024, the debt sector experienced a 16.49% year-on-year growth, but encountered difficulties as net sales plummeted to -Rs 21,866 crore. Gross redemptions surpassed gross sales, underscoring investor hesitancy in the midst of fluctuating interest rates.