Topic 6: MUTUAL FUNDS: BUILDING TRUST

In December 2024, the Indian mutual fund industry saw impressive growth, driven by a sharp rise in assets under management (AUM) and strong inflows from retail investors. The AUM reached ₹69 lakh crore by the end of December 2024, reflecting a remarkable increase of 35.5% from ₹50.24 lakh crore in December 2023. A significant contributor to this growth was the surge in systematic investment plan (SIP) contributions, which hit ₹25,320 crore by November 2024, up 44% from ₹17,610 crore in December 2023. This trend indicates that retail investors are increasingly embracing disciplined and regular investing strategies. The total SIP AUM reached a record ₹13.54 lakh crore, showcasing the growing popularity of this investment approach across Indian households. Equity funds, especially mid-cap and small-cap schemes, outperformed other categories, benefitting from a favourable market environment. Both the Nifty Midcap 100 and Nifty Small cap 100 indices saw strong gains, enhancing the performance of equity mutual funds. Active equity schemes witnessed record inflows of around ₹3.5 trillion, more than doubling the previous year's figure of ₹1.6 trillion, with SIPs contributing nearly ₹2 trillion. The industry also added about 9.8 million new investors in the first eleven months of 2024, raising the total number of unique investors to around 51.8 million by November. Thematic funds, particularly those focused on sectors like technology and healthcare, attracted substantial inflows, benefiting from the ongoing economic recovery. On the other hand, debt funds saw a sharp decline in inflows, with November 2024 recording a 92% drop compared to the previous month. Despite this, 2024 witnessed a record number of fund launches, with 153 equity schemes introduced, further diversifying options for investors. to around 51.8 million by November. Thematic funds, particularly those focused on sectors like technology and healthcare, attracted substantial inflows, benefiting from the ongoing economic recovery. On the other hand, debt funds saw a sharp decline in inflows, with November 2024 recording a 92% drop compared to the previous month. Despite this, 2024 witnessed a record number of fund launches, with 153 equity schemes introduced, further diversifying options for investors.



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