MF Update: Indian Equity Mutual Fund in FY18

The Indian equity mutual fund industry has continued to grow its asset under management (AUM). This is despite a volatile equity market that we witnessed in the last two months of FY18.

For FY18, the AUM of equity mutual fund increased by 38 per cent on yearly basis to Rs. 7.5 lakh crore at the end of FY18. The number would have been higher had it not been for the last two month of FY18 when the overall equity AUM dipped by 1.3 per cent and 3.5 per cent in the month of February and March, respectively. Till the month of January 2018, when market touched an all-time high, Indian equity MF AUM had shown a growth of 45 per cent on a yearly basis. Nevertheless, at the end of FY18, equity AUM, as a percentage of India’s market capitalization, increased by 80 basis points YoY to touch 5.3 per cent.

Most of the increase in equity AUM in FY18 was led by higher inflows or scheme sales of Rs. 4,00,500 crore, which was an 82 per cent growth on a yearly basis. Redemption in the same period increased by 54 per cent to Rs. 2,29,400 crore. This led to doubling of net inflow in the equity fund in FY18. Net inflow in equity AUM increased from Rs. 70,400 crore in FY17 to Rs. 1,71,100 crore in FY18. Strong equity market up moves also helped some part of the gain.

Overall, the mutual fund AUM for FY18 increased by 26 per cent on a yearly basis. What contributed to such growth was higher inflows in the equity, balanced and income categories. They together contributed almost 90 per cent of total inflows in a domestic mutual fund.

In terms of sector weightage in FY18, Banks, Autos, Cement, Media and Capital Goods saw a decline whereas NBFCs, Retail, Real Estate and Infra increased their weightage. Some of the most prominent companies that saw an increase in the holdings were TCS and Bajaj Finance.