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Key Points

The mutual fund sector has shown remarkable growth in exposure to non-banking financial companies. Total assets under management increased to Rs 72.2 lakh crore in May, with significant inflows in equity and hybrid categories. Equity funds experienced a 4.83% rise, driven by positive market flows and mark-to-market gains. The financial landscape continues to demonstrate resilience and dynamic investment patterns.

Key Points: Mutual Fund NBFC Exposure Surges 32.5% to Rs 2.77 Lakh Crore

  • Mutual fund AUM rises to Rs 72.2 lakh crore in May
  • Equity funds grow 4.83% with robust net inflows
  • NBFC credit share drops from 9.3% to 8.5%
  • Passive funds witness 55th consecutive month of net inflows
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MF exposure in NBFCs grow 32.5 pc to reach Rs 2.77 lakh crore in May

CareEdge Report Reveals Significant Growth in Mutual Fund Investments in Non-Banking Financial Companies Amid Market Dynamics

"Commercial papers and corporate debt remained consistent over 14 consecutive months - CareEdge Ratings Report"

New Delhi, July 2

The mutual fund exposure in the non-banking financial companies (NBFCs) grow 32.5 per cent to reach Rs 2.77 lakh crore in May, according to a new report.

This year-on-year growth was driven by commercial papers (CPs) and corporate debt, which remained over Rs 2 lakh crore for 14 consecutive months, according to a CareEdge Ratings report.

The previous records were Rs 2.69 lakh crore in April this year and Rs 2.64 lakh crore in July 2018.

However, the share of NBFC credit in total bank credit decreased from 9.3 per cent in May 2024 to 8.5 per cent in May this year, the data showed.

The mutual fund industry's total assets under management (AUM) rose to Rs 72.2 lakh crore in May from Rs 70 lakh crore in April. The industry witnessed net inflows of Rs 29,108 crore during the month, with 65 per cent flows from the equity category, according to the latest AMFI data.

AUM of equity funds rose 4.83 per cent on-month to Rs 32.05 lakh crore, driven by positive flows and mark-to-market (MTM) gains. Flexi caps witnessed inflows of Rs 3,841 crore, the highest in the equity category for the third straight month.

Hybrid fund assets grew 4.43 per cent to Rs 9.55 lakh crore, driven by highest monthly net inflows for the category worth Rs 20,765 crore and MTM gains. Arbitrage funds witnessed the highest inflows within the category, amounting to Rs 15,702 crore.

Passive funds category witnessed net inflows of Rs 5,525 crore during the month, marking the 55th consecutive month of net inflows.

Gold exchange-traded funds (ETFs) witnessed net inflows during the month, compared with outflows in the previous two months, driven by geopolitical tensions, market volatility and rate cut expectations.

- IANS

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Reader Comments

P
Priya S
While the numbers look impressive, I'm concerned about the decreasing share of NBFC credit in total bank credit. Does this indicate banks are becoming more risk-averse? Would love to hear expert opinions on this.
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Aman W
Gold ETFs seeing inflows again! Smart move by investors given the current geopolitical situation. I shifted 10% of my portfolio to gold last month - better safe than sorry 😅
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Shreya B
The consistent growth in passive funds for 55 months shows how Indian investors are maturing. SIP culture is really picking up! My father still doesn't trust mutual funds though - old school FD mentality 🙄
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Varun X
The hybrid fund growth is interesting. Many first-time investors are choosing these for balanced exposure. But newbies should be careful - don't just chase returns, understand the risks too!
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Nikhil C
As a financial advisor, I'm seeing more young professionals opting for MFs over traditional savings. The ₹2.77 lakh crore figure is impressive, but we need better financial literacy to sustain this growth.

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