CURRENT AFFAIRS
CURRENT AFFAIRS
Description
SBI Mutual Fund (SBI MF) made history on June 3 by becoming India's first fund firm to reach Rs 10 trillion in assets under management (AUM). This huge achievement is due to the post-pandemic equity bubble and increased awareness of mutual fund investing.
Key Drivers Of Growth
Equity Market Rally And Expanding Investor Base
The increase in SBI MF's AUM follows a broader industry trend, fueled by an equities market rally and an expanding number of mutual fund investors. Growth is driven by both asset appreciation within schemes and new inflows.
Strategic Product Launches And Extended Reach
D P Singh, Deputy Managing Director and Joint CEO of SBI MF, stressed the need of timely product introductions and growing penetration throughout India. Leveraging the parent business SBI's network and working with other distributors have been critical to their success.
Institutional And Retail Contributions
Significant Institutional Investments
Institutional investors, including the Employees' Provident Fund Organisation, own roughly Rs 5 trillion of total AUM, mostly through passive schemes. As of April 2024, SBI's own contributions amounted for Rs 2 trillion of the SBI MF's AUM.
Retail Investors and SIP Growth
Over Rs 5 trillion of AUM is in direct plans, with the remainder Rs 2.2 trillion tied to various distributors. The expansion of Systematic Investment Plans (SIPs) has also increased their retail investor base.
Industry leadership
Consistent AUM growth
Since taking the top spot in AUM rankings in March 2020, with an average AUM of Rs 3.7 trillion, SBI MF has regularly outperformed the industry average, expanding its lead over competitors such as ICICI Prudential MF, HDFC MF, Nippon India MF, and Kotak MF.
Increase in Unique Investors
The mutual fund industry's unique investor count has increased from 20 million in March 2020 to 45 million in March 2024, demonstrating mutual funds' expanding popularity.
Portfolio Composition
Diverse investment schemes
Passive and overseas funds account for the majority of SBI MF's total AUM (36%), followed by active equity schemes (29%), and active debt schemes (18%).
Post-Pandemic Investment Trends
Increased Appeal of Mutual Funds
Mutual funds have gained in popularity since the epidemic, thanks to an appealing equities market, a lack of inflation-beating investment options, and the accessibility of internet investment platforms.
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