New investors add to MFs’ wealth during pandemic
NEW DELHI: For long mutual funds have been trying to attract investors as tools for contingency savings the year 2020 saw one of the most unexpected events unfold when the Covid-19 pandemic engulfed the entire world.
After wild swings in a pandemic-ravaged year, the stock market finally appears to end with unusually high gains, which coupled with robust inflows in fixed income schemes helped mutual funds add a staggering ₹3.5 lakh crore to their asset base in 2020. Experts believe the new year is expected to be even brighter for the industry.
The asset under management (AUM) of the mutual fund industry grew by 13% to an all-time high of ₹30 lakh crore in 2020 by November-end itself, from ₹26.54 lakh crore at the end of
December 2019, data available with the Association of Mutual Funds in India (Amfi) showed. The investor count is estimated to have grown by over 65 lakh during the year. This was, however, way below than 99 lakh folios added in the entire 2019.
However, Amfi chief executive N S Venkatesh believes that the final mutual fund AUM figure at December-end might be slightly lower than that of November as there could be an outflow from liquid and overnight funds from corporates due to a quarter-end phenomenon. Going into 2021, Venkatesh said that the asset base is expected to grow by 16-17% on recovery in the economy and positive development on the vaccine front.
FPIs invest ₹60,094 cr in Dec on vaccine optimism
Foreign portfolio investors (FPI) invested a net ₹56,643 crore into equities and ₹3,451 crore into debt instruments between December 1-24, according to the depositories data. The total net investment during the period under review stood at ₹60,094 crore. In November, the total net investment of FPIs stood at ₹62,951 crore.
FPI inflows were boosted post the US election result, Vinod Nair, head of research at Geojit Financial Services commented.