Mutual Funds, AUM falls marginally in November after 21 months of rising trend

The average assets under management (AUM) of mutual funds in India witnessed a marginal decline for the first time in 21 months in November 2024, according to a report by the National Stock Exchange (NSE).

The overall AUM fell by 0.7 per cent month-on-month (MoM) to Rs 68 lakh crore, marking a modest dip in the mutual fund industry's growth trajectory.

It said "Average net assets under management (AUM) of Indian mutual funds declined by a modest 0.7 per cent MoM to Rs 68 lakh crore in November".

The decline was primarily attributed to equity-linked funds, which saw their AUM drop by 1.8 per cent MoM to Rs 38.1 lakh crore.

This marked the first decline in three months for equity funds. In contrast, debt funds showed resilience, with their AUM rising by 1.6 per cent MoM to Rs 19.4 lakh crore.

The lower AUM in November was driven by a slowdown in fund mobilisation through existing and new schemes across both equity and debt categories.

Fund mobilisation fell by 17.6 per cent MoM to Rs 10.2 lakh crore, hitting a six-month low.

The report stated that coupled with high redemptions, this resulted in a significant drop in net inflows into mutual funds, which stood at just one-fourth of the net inflows recorded in October.

It also noted that october had witnessed record-high net inflows of Rs 2.4 lakh crore, making November's decline more pronounced in comparison.

However, the report suggested that the drop in November could be seen as a correction following the exceptionally high inflows in the previous month.

Despite the overall decline, SIP (Systematic Investment Plan) inflows remained steady, reflecting investors' continued trust in mutual funds as a long-term investment vehicle.

SIP inflows in November stood at Rs 25,320 crore, while the SIP AUM reached Rs 13.5 lakh crore, now accounting for nearly 20 per cent of the total industry AUM.

The mutual fund industry continues to demonstrate resilience, supported by stable SIP contributions, even as market conditions and investor sentiment fluctuate.