Investments in mutual funds in New Delhi are steadily increasing month over month, with total Assets Under Management (AUM) showing a significant rise in July 2024, compared to the previous year. However, there is also a simultaneous surge in redemptions as investors book profits with markets at their peak. The gap between investments and redemptions is narrowing, with redemptions increasing by 61 per cent during the same period. The AUM for mutual funds in July 2024 increased to Rs 64,96,653 crore, up from Rs 46,37,564 crore in July 2023. On the other hand, redemptions in July 2023 amounted to Rs 18,28,851 crore, which surged by 60.68 per cent to Rs 29,38,613 crore in July 2024.
Experts attribute the surge in investments in mutual funds over the past year to the better returns provided by the industry. The high returns generated in the Indian stock markets have attracted increased investments. However, the report also indicates that redemptions are surging due to the heightened risk in the market, which is at an all-time high. While investments in AUM mutual funds registered a growth of 40 per cent, redemptions from the funds or equity outflows have surged by more than 60 per cent. In June 2024, the mutual fund industry showcased robust growth, particularly in the exchange-traded funds (ETFs) segment, which recorded gross sales of Rs 18,349 crore. This surge was supported by the launch of six new schemes that collectively mobilized Rs 179 crore, showing a strong appetite for innovative investment options among investors.
The mutual fund industry in July 2024 saw a 6.23 per cent increase in AUM compared to June 2024. Equity funds experienced outflows in July 2024, amounting to Rs 44,076 crore. Sectoral and thematic categories emerged as significant contributors to the market, with net inflows of Rs 9,790 crore. This trend reflects a growing interest among investors in targeted investment strategies that align with specific sectors or themes to capitalize on market opportunities. Cash AUM also saw a modest increase of 1.95 per cent since July 2023, indicating a stable liquidity position within the industry. The retail segment, in particular, has seen impressive growth at a compound annual growth rate (CAGR) of 31.55 per cent.
Overall, the data from Axis Mutual Funds highlights the trend of increasing investments in mutual funds in New Delhi, driven by better returns offered by the industry. However, the rise in redemptions as investors book profits in a market at its peak is also significant, narrowing the gap between investments and redemptions. Despite the surge in redemptions, the industry continues to show growth, particularly in the ETFs segment, indicating a strong appetite for innovative investment options among investors. Sectoral and thematic categories have also emerged as key contributors, reflecting a growing interest in targeted investment strategies. The stability of cash AUM and the significant growth in the retail segment further underscore the positive outlook for the mutual fund industry in New Delhi.
