Mutual Fund Industry Reports Record-High Growth in 2024
The Indian mutual fund industry grew the highest ever in 2024, adding Rs.17 lakh crore to its total assets under management. A strong stock market, a fast-growing economy, more and more people investing, and the popularity of SIPs were the reasons behind such growth. The total assets under management (AUM) for the industry reached Rs.68 lakh crore by the end of November 2024, a 33% increase from Rs.50.78 lakh crore at the end of 2023.
Big Investments and New Investors
In 2024, the industry received Rs 9.14 lakh crore in new investments, and 5.6 crore new investors joined. SIP contributions greatly accounted for Rs.2.4 lakh crore within the year. In almost every month, SIP investments also exceeded Rs.25,000 crore. This, undoubtedly, indicates that the Indian investor likes disciplined investing. It’s long-term and not the get-quick-rich scheme.
Equity Funds Drive Growth
Equity funds played a big role in this growth, receiving Rs.3.53 lakh crore in investments. People have been investing in these funds on a monthly basis since March 2021. In 2024, equities were one of the most popular as their stock market did well. This year, the Nifty 50 increased by 8.5%, and the BSE Sensex rose to 8%.
Sector-specific and thematic funds saw a huge growth in 2024. Their total value increased by 79%, from Rs.2.58 lakh crore in 2023 to Rs.4.61 lakh crore. This growth was driven by Rs.1.4 lakh crore in new investments and the launch of 40 new funds.
Debt Funds attract Big Investors
Debt funds including liquid, ultra short and low duration funds attracted large investors to invest into short term asset. Large number of retail investors have also shown keen interest towards gilt and dynamic duration fund by expecting cuts in interest rates in 2025.
Gold Investment on Rise
People in 2024 invested Rs 9,500 crore into gold funds because they found that the safest place for their money in the case of a financial storm. The third is that multi-asset funds also added gold to their portfolios to make sure diversification. New tax rules beginning April 2025, treat Gold ETFs at par with equity investments.
Supportive Rules Boost Growth
Regulatory changes helped improve the mutual fund industry. Under the new MF Lite, it became easier to initiate new fund companies. A new category, ‘Specified Investment Funds,’ allowed smaller investors to access boutique funds that have a reduced minimum investment of Rs.10 lakh.
The industry grew by Rs.17 lakh crore in 2024, which is much more than the Rs.11 lakh crore growth in 2023. Over the last four years, it has added Rs.30 lakh crore to its total assets, showing steady progress.
At the end of the year 2023, AUM stood at Rs.50.78 lakh crore, up by Rs.40 lakh crore in 2022, Rs.37.72 lakh crore in 2021 and Rs.31 lakh crore in 2020. The year 2024 also marked the growth for the 12th straight year of mutual funds.
Bright Future Ahead of 2025
The mutual fund industry has prospects of continuing to increase in 2025 since more people are investing. The SIPs have become widely used, and financial literacy has increased. As long as the economy of the country is growing, long-term growth is expected; the industry has shown immense importance in the financial sector.
