Growth in The Mutual Fund Industry! Kya Mutual Fund Sahi Hai

India’s mutual fund industry continues to exhibit robust growth, with its Assets Under Management (AUM) reaching a new milestone of ₹66.70 lakh crore in August 2024, according to data from the Association for Mutual Funds in India (AMFI). This substantial increase reflects a surge in investor interest driven by factors such as India’s burgeoning economy and rising financial literacy.

Mutual funds have become a popular investment choice for Indian retail investors due to their accessibility and potential for growth. The industry’s journey has been marked by impressive milestones. It took 50 years to reach ₹10 lakh crore in AUM, but in just six years following, it doubled to ₹23 lakh crore. The latest figures demonstrate the industry’s continued momentum, with AUM tripling to ₹66.70 lakh crore in August 2024, showcasing strong investor confidence.

Why are Indians Betting Big on SIPs?

Mutual funds, especially through Systematic Investment Plans (SIPs), have witnessed a significant surge in popularity among Indian investors. The number of folios grew by 3.16% in August 2024, reaching 14.3 crore, underscoring the increasing appeal of mutual funds as a vehicle for capitalising on India’s equity markets.

The launch of new fund offerings (NFOs) has played a pivotal role in driving this growth. In August, six NFOs were introduced, collectively raising ₹11,067 crore. Sectoral and thematic funds dominated the new launches, accounting for five of the six NFOs and garnering ₹10,202 crore. This contributed to a net inflow of ₹18,117 crore into the sectoral and thematic fund category for the month.

Why Maintain SIP Investments During Market Fluctuations?

Market volatility can often lead investors to question their investment decisions and consider pausing or withdrawing their Systematic Investment Plans (SIPs). It’s understandable to feel anxious when your investments decline during a volatile market. However, maintaining a disciplined approach and continuing your SIPs, especially during downturns, can be a prudent strategy.

Read More About What is NFO?

When markets are falling, investing the same amount each month allows you to acquire more units of the fund. This is similar to bargain shopping, where you can buy more of a product at a lower price. So, why not apply the same logic to your mutual fund investments? By staying invested during volatile periods, you can potentially benefit from future market rebounds.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.