Investors pumped in a record Rs3.43 lakh crore in mutual funds (MFs) in 2016-17, mainly into income and liquid schemes.
According to the Association of Mutual Funds in India (Amfi) data, a net of Rs 3,43,049 crore was invested in these schemes last fiscal ended March 31, more than double of Rs 1,34,180 crore seen in 2015-16. This was the highest investment in MF schemes since 1999-2000. The data for entire fiscal prior to this period is not available with Amfi.
"Financial year 2016-17 has been a golden year for Mutual Fund industry and much of the credit can be given to maturity of retail investors who have come up in the 'learning curve' by contributing 1.3 crore monthly systematic investment plans," Bajaj Capital Group Director Anil Chopra said.
COO of Fundsindia.com, an MF investment portal, Srikanth Meenakshi said: "Retail investors appear to have become savvier, using liquid schemes to either earn higher returns or to run Systematic Transfer Plan (STPs) into equity funds.
"Inflows into debt funds have risen. Deposit rates have been falling, resulting in lower returns for investors. Falling rates help debt fund returns as yields instruments rally, which could have additionally helped draw in investors," he said.
Investors have put in most of the money in liquid, income and equity funds. Income funds, which provide returns either on monthly or quarterly basis as opposed to capital appreciation, attracted Rs 1.22 lakh crore.
Such funds usually hold a variety of government, municipal and corporate debt obligations, preferred stock and dividend-paying stocks. Liquid or money market fund category saw net inflows of Rs 95,826 crore.
They invest mainly in money market instruments like commercial papers, treasury bills, term deposits and have a lower maturity period and do not have any lock-in period.
Equity and equity-linked schemes saw inflows of more than Rs 70,000 crore. The robust inflow has helped assets under management (AUM) of all the 41 active fund houses soared to a record Rs 18.3 lakh crore at the end of March 31, 2017 from Rs 13.53 lakh crore at the end of preceding fiscal.