Top mutual fund AUM surge 45% in 2023 – What’s driving the fund flow – Market News

The Indian equity bull run of 2023 has significantly bolstered the fortunes of major asset management companies (AMCs), propelling average equity assets under management (AUM) to an impressive 45% year-on-year growth for large players or funds with over 1 lakh crore average AUM.

Topping the list with a staggering 57% growth in total average AUM is the Tata fund house, closely followed by Nippon India Mutual Fund, which achieved a commendable 46% growth.

The aggregate average AUM for this subset of mutual funds has surged by approximately 30%.

In the realm of average equity, Nippon India Mutual Fund stands out with an exceptional 65.5% YoY increase, trailed by Edelweiss Mutual Fund at 60% and HDFC Mutual Fund at 57%. Notably, the equity component forms a modest 22% of the total portfolio for Edelweiss Mutual Fund.

Mirae Asset Mutual Fund claims the highest proportion of equity AUM, constituting 84% of its total assets among the major AMCs, followed by SBI Mutual Fund and Nippon India Mutual Fund.

As of January 2024, SBI Mutual Fund maintains its position as the largest fund house in India, boasting an average equity AUM over 64% higher than the second-largest equity AUM holder, ICICI Mutual Fund.

Atul Parakh, CEO of Bigulattributes this surge as the positive performance of the market likely attracted further investments, which further amplified the growth. A growing number of individual investors entered the mutual fund market, seeking potentially higher returns compared to traditional options like fixed deposits. 

“Besides, the ease of investing through online platforms also drove an increase in retail investors entering the market. This influx of new investors bought in fresh capital, which significantly contributed to the overall AUM growth,” said Parakh.

Over the past year, key market benchmark indices have witnessed an approximately 20% rise, with broader markets outperforming significantly. BSE Midcap and Smallcap indices have surged by more than 64% each during this period, reflecting the robust health of the Indian equity landscape.

This data underscores the positive impact of the equity bull run on the mutual fund industry, showcasing the resilience and attractiveness of Indian equities for investors.