As bank deposit rates fell and stock markets rose, mutual funds in 2016-17 received the highest net inflows in at least 11 years, led by income and liquid schemes.
Net inflows in the fiscal year ended March rose 155.66% from a year before to Rs 3.43 trillion, the highest since at least 2005-06 when the equity market was gaining traction, data from the Association of Mutual Funds in India (AMFI) showed.
India’s benchmark index Sensex rose 16.88% during the financial year, and was the third best-performer among its Asian peers. The index has delivered a compounded annual return of 13.48% from 2005-06 to 2016-17.
“A rise in systematic investment plans (SIPs) is the most important factor contributing to the rise in inflows into mutual funds. Investors are also more aware and disciplined in investing from a long-term perspective,” said Gopal Agrawal, chief investment officer (equities) at Tata Asset Management.