In September, the count of unique investors in mutual funds (MFs) crossed the 40 million mark, with the addition of 10 million new investors in the preceding 21 months. Notably, these investors constitute a significant portion of the financial landscape, accounting for around 57% of all income tax filings this year, and comprising 6.5% of all PAN card issuances, indicating the growing importance of mutual fund investment.
The count of unique investors is based on the total number of PAN (Permanent Account Number) registrations within the MF industry. This achievement came at a time when the industry witnessed a surge in gross systematic investment plan (SIP) inflows. In September, the industry experienced a historic milestone as it received over Rs. 16,000 crore (approximately US$ 1.92 billion) through the SIP route for the first time.
While a significant portion of net inflows in active equity schemes still comes from regular investors, there was a 30% month-over-month decline, with these inflows amounting to Rs. 14,090 crore (around US$ 1.69 billion). This decrease in net inflows could be attributed to profit booking activities in small- and mid-cap funds. In September, redemptions from these two fund categories increased by 42% month-over-month, totaling Rs. 7,430 crore (approximately US$ 892.5 million).
What’s remarkable about this scenario is that September’s inflows exceeded the average for the fiscal year 2024. Industry experts view this as a testament to the resilience of MF investors, as they continued to invest despite market uncertainties and record-high index levels.
Although the total net flows in small- and mid-cap categories decreased compared to previous months, these categories maintained their prominence in the market. In September, the small-cap category received Rs. 2,678.4 crore (approximately US$ 328.7 million), while the midcap category saw inflows of Rs. 2,000.8 crore (around US$ 240.2 million), as reported by Ms. Melvyn Santarita, Analyst-Manager Research at Morningstar Investment Adviser India.
