Mutual funds (MFs) added 70 per cent more investors in the financial year 2023-24 (FY24) than in FY23 on the back of an equity market turnaround. MFs onboarded 6.8 million unique investors in FY24, taking the total MF subscriber count to 44.5 million. In FY23, the additions stood at 4 million.
The rebound in the pace of investor additions in FY24, according to experts, is largely a result of a reversal in equity market fortunes. The benchmark indices — Nifty 50 and Sensex — surged over 25 per cent in FY24, after delivering near-zero returns in FY23. The other factor is new fund launches in popular categories, as the promotion and marketing activities go up.
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However, the FY24 additions are still significantly lower than the FY22 tally, when nearly 11 million investors entered the MF fold. In FY24, MFs launched 58 active equity schemes compared to 32 in FY23.
The surge in investor interest in the equity market also reflects in the SIP data. The active SIP accounts went up by 20 million in FY24, almost double the 10.8 million net additions in FY23. Over 82 per cent of the active SIP accounts were in active equity schemes as of February 2024, shows data from Amfi.
The total number of unique investors is mapped by the total Permanent Account Number (PAN) registrations.
The unique investor count has doubled in the past three financial years. The industry has set a target of 10 million investors by 2030 as it looks to take the total assets under management (AUM) past the Rs 100 trillion mark.
Ganesh Mohan, CEO of Bajaj Finserv Asset Management Company, said the rising penetration of the MF industry across the breadth of the country was along the expected lines. “Some of it is due to the low existing investor base and we are only beginning to catch up. In a way, we may be experiencing what the telecom industry experienced in the early 2000s. We expect this trend of more unique investors coming on board to grow further in the coming years,” Mohan said.
Even as the investor addition has picked up, the tally is still far off from the potential customer base. At 44.5 million, the MF customer base is only around half of the latest tally of income tax return filings at 82 million.
The impact of the market rally in FY24 was not just limited to MFs as other equity investment avenues also witnessed higher investor interest, say experts.
First Published: Apr 11 2024 | 7:30 PM IST