INSUBCONTINENT EXCLUSIVE:
Growth of mutual funds (MFs) subsided in 2022 as the equity market struggled to inch up
Until November this year, the industry has added 5.8 million investors, compared with 6.8 million in the corresponding period last year
The assets under management has risen by Rs 2.6 trillion during the period, down 63 per cent from Rs 6.9 trillion in January-November 2021,
The equity market has remained range-bound this year as foreign investors pulled out record sums from the Indian market
As of December 13, the Nifty50 has risen 7 per cent
Most of the growth has happened in the last two months
By comparison, the Nifty50 went up 24 per cent in 2021
In 2021, growth was supported by a strong market rally
The interest rate hikes this year could also be a factor, says Amit Bivalkar, founder and director of Sapient Wealth
The fact that there were fewer equity fund launches also weighed on new investor addition
According to MF distributors, new fund offers by top fund houses help the industry bring in new investors, thanks to aggressive marketing
and sales strategies deployed at such times
However, systematic investment plan (SIP) registrations and inflows have remained strong
In the January-November period, 23 million new SIP accounts were started, compared with 22 million in the same period last year
The inflows through SIPs continued to trend upwards
The SIP inflows, which were at Rs 11,516 crore in January this year, rose gradually to Rs 13,300 crore by November
At the same time, the discontinuation of SIPs has also gone up
While SIP registrations are up 6 per cent, SIP closures have gone up 30 per cent this year
As a result, the ratio of SIPs stopped as a percentage of fresh SIPs registered (SIP stoppage or closure ratio) jumped to 51 per cent this
year, from 41 per cent last year
In 2021, the MF industry hit a strong growth path on the back of a strong market rally
There were also other factors like a rise in savings and a lack of other high-yielding investment opportunities.
