Mutual fund AUM will jump to Rs 100 lakh crore from current levels by 2030, says NS Venkatesh of AMFI

While the latest data from the Association of Mutual Funds in India (AMFI) shows that equity mutual fund inflow dipped in May 2023 after witnessing a net inflow of Rs 2,906 crore as compared to Rs 5,275 crore in April 2023, AMFI Chief Executive NS Venkatesh firmly believes AMFI is inching towards the target of Rs 100 lakh crore AUM by 2028-2030.  

In an exclusive interview with Business Today, he said, “This Rs 43.20 lakh crore itself is the highest number seen in the last couple of years if we look at it, but we believe that with the Indian growth story doing well, Indian economy ramping up very fast, we will also get the fair share of money coming in into the mutual fund industry. So we have tracked how the economy grows, and our thought process is that by at least around 2028 to 2030, we should be able to see the 100 lakh crore AUM number.” 

On the primary reason for the lowest inflow since November 2022, when the it was Rs 2,224 crore, Venkatesh said: “I would say that compared to the last month particularly it has dropped for the simple reason, that is, there is a profit booking which happened so people are booking their profits, particularly from the large-cap funds. People are taking their money.” 

He said, “The mid-cap and small-cap are doing reasonably well. Slowly attraction has shifted to mid-caps and small-caps at this particular point mainly because the valuations had undergone a steep correction of around 60-65 per cent. Now it looks very attractive, so people are coming into these small-cap funds to participate in the small-cap stocks rally so that you can see the differential happening. But I agree that there has been a little bit of a drop in the equity net flows into the equity mutual funds mainly because of the profit booking, which is a large reason behind it.” 

In May, the small-cap inflow performed well and registered a fund inflow of Rs 3,283 crore as against Rs 2,182 in April. The mid-cap and dividend yield funds witnessed inflows at Rs 1,196 crore and Rs 289 crore, respectively. 

Also, systematic investment plan (SIP) inflows achieved a new high of Rs 14,749 crore in May, compared with Rs 13,728 crore in April.  

On AMFI being a part of an ethics committee that would set up internal mechanisms within fund houses to catch frauds such as front-running and insider trading, Venkatesh said, “It is too early to comment, in the sense the SEBI chairperson had given us that sort of an indication during the inauguration of our new premises. She said that we should have an ethics committee, which is the right thought process for when the industry grows. You need to have more self-regulation in place, and towards that independently, the Ethics Committee will play a part we are discussing internally amongst the members as well as with our board.” 

“Hopefully, maybe in a month to 45 days, we should come out with a concrete proposal on how the ethics committee will be formed, who will be the constituent of the ethics committee, including maybe independent personnel who could make to be part of that ethics committee and then that ethics committee will give out the broad guidelines on how various best practice guidelines should be followed. Also, wherever any particular AMC is not doing it in the right fashion, the ethics committee will take action based on such events. So that is how it is at this particular point of time, but it is a working process,” he added.