AMFI-Crisil Study Insights: Mutual Fund Investments by Women have More Than Doubled Over the Past 5 Years
The latest AMFI-Crisil Factbook reveals that women investors have a crucial role in the growth of mutual fund investments. Additionally, small-cap funds have now become a fast-growing segment. Let us take a look at some other highlights from the study.
Investors are moving towards Small-Cap Funds
The small-cap segment has performed better than other equity categories in terms of SIP, accounting for more than half of the total assets under management (AUM). The number of investors investing in small-cap funds is increasing as these funds focus on smaller companies that have the potential for high growth. However, some funds have started limiting the large lump-sum investments in these funds to protect the investors from bearing losses as small-cap funds carry high risk with them.
Women Investors See Rapid Growth in Equities and Mutual Funds
Women investors are forming a major part of the investing world. They now hold 33% of the total fund invested by individual investors. The mutual fund industry is experiencing rapid growth as more women are investing in the fund, and about one in four people who invest in mutual funds are women.
Women have been growing their investments at a faster rate as compared to men. Between March 2019 and March 2024, the average size of women’s investment portfolios (folios) grew by 24%, while men’s grew by only 6%. This means women are not only investing more but their investments are also growing fast.
Equity Funds Lead SIP Growth
Equity funds now make up over 80% of the total AUM through SIP. This indicates that more investors are focusing on building wealth over a long period of time. In the last 5 years, SIP AUM in the small-cap segment has grown a lot from Rs. 0.19 lakh crore in March to Rs. 1.24 lakh crore in March 2024.
Similarly, midcap funds have also grown, with around 46% of category AUM coming from SIPs. On the other hand, some categories, like sectoral/thematic and dividend yield funds, have seen a decline in the share of SIP investments compared to other types of equity funds.
SIPs are becoming Popular among Investors
Systematic Investment Plans (SIPs) are well known and have gained popularity among investors in recent years. The AUM SIP has increased by 300%, going from Rs 2.66 lakh crore in March 2019 to Rs.10.62 lakh crore in March 2024. The number of investors investing in mutual funds through SIPs has also more than doubled in five years. It has grown from 2.1 crore people in 2019 to 4.5 crore people in 2024.
According to a report, SIP AUM for investors who are between the ages of 18 and 34 has been a major part of this growth. The money invested by this age group has grown more than 2.6 times, going from Rs.41,209 crore in March 2019 to Rs.1.51 lakh crore in March 2024
Passive Funds have seen a Rise in its Growth
Passive funds are investment vehicles that track a benchmark index and try to mirror its performance. These funds are usually cheaper to invest in than active funds. It has also witnessed growth, with its AUM increasing at a CAGR of 44.4% between March 2019 and March 2024. This shows that more investors are preferring low-cost investment funds.
Investors tend to keep their money invested for a longer time with Regular Investment Plans
Although direct investments have seen a rise between March 2019 and March 2024, regular investments still remain the most popular choice, with 58.8% share as of March 2024. Retail investors and high-net-worth individuals (HNIs) together account for 78.4% of the AUM in regular investment plans. According to the AMFI-Crisil Factbook, regular investments usually have a longer holding period than direct investment plans.
The share of regular investments with a holding period of more than 5 years is higher than direct investments, which stood at 21.2% compared to just 7.7% for direct investments. This indicates that the guidance provided by intermediaries has played a significant role in encouraging investors to stay disciplined and invest for the long term.
