Calm despite the storm: The Indian Mutual Funds Scenario

The impervious India Scene

On June 25, 2016, the fateful Friday that immediately followed the day the final results of Brexit poll were announced, equity Mutual funds investors in India surprised observers with a significant upsurge in transactions, even as the rest of the world was reeling from the Brexit impact.

While estimations and predictions on how complex the situation could get seemed to swamp the confidence of investors in several markets across the world, retail investors in India, seemed to hold their calm and even leveraged the fall of Sensex by 1000 points to buy more stocks at discounted prices.

Why we stand steady

In recent years, Indian investors have continued to adhere to “opportunistic buying” during times of tumult in the global market situation. One of the reasons that India could hold steady, lies in the market’s diminutive reliance on foreign investment as against the robust contribution from domestic investors. Also, that the RBI had pledged support to ensuring dollar and rupee liquidity in the market, without interfering with its natural rhythm, had effected confidence in local investors to play it calm.

Strong growth recorded in the April-June quarter

Recent observations that the Average AUM of Indian Mutual funds has crossed a new high of 14.45 lakh crore in Rupees, in the quarter that ended June 2016, seem to agree with the upward trend.

AAuM

The CAMS perspective

An integral part of the Indian Finance sector and a trusted service partner to 8 out of the top 10 AMCs in India, CAMS had retained its position as the market leader with a substantial market share of 62.18%, as recorded in the quarter ended June.

The following inferences are based on data provided by CAMS Data Bureau Services – covering 92% of Mutual Fund Industry –

Gross sales for the quarter

Gross inflows recorded by CAMS, for the quarter ended June, was around 37 lakh crores of Rupees, indicating a growth of 12% from its value in the previous quarter. It is encouraging to note that investments from smaller towns have increased during the said period. The Gross Sales in B-15 locations had increased by 22% as compared to the quarter ended March.

Retail investors on the rise

New SIP registrations had increased by 10%, with 11.9 lakh SIPs in the quarter ended June, as against 10.78 lakh in the previous quarter. This growth indicates a significant increase in participation of Retail investors in the MF sector, which could be attributed to the measures and reforms as instituted by SEBI in favor of improved transparency.

The way ahead

Given the current scenario, industry veterans are of the opinion that domestic inflows are unlikely to decrease in magnitude, in the near future. Also, foreign investors are seen to be returning to the Indian investment scene, attracted by its relatively stable market despite Brexit, mounting oil prices, sluggish Chinese growth or the impending US Fed tightening. If anything, the ambiguities will provide for more buying opportunities, here. On the whole, the way ahead seems encouraging with rosy prospects for investors and AMCs, alike.

About CAMS:

CAMS Logo High Resolution

Computer Age Management Services (CAMS) is India’s premier Mutual Fund Transfer Agency serving over 62% of assets of the industry across 16 Mutual Funds. Leveraging superior technology, CAMS brings several innovative services to Mutual Fund investors and distributors. CAMS is also a service partner to leading insurance companies, banks, NBFC’s and alternate investment funds. To know more visit www.camsonline.com

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Published by

Sudarshan Ranganthan

Breaths Investments, Suggests Wealth Creation Ideas, Lives on Law Of Attraction

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