Mutual Funds Raise Rs 63,854 Cr Through NFOs In 2023
Asset management companies launched 212 new fund offerings, raising Rs 63,854 crore in 2023, slightly higher than the previous year. In comparison, AMCs garnered Rs 62,187 crore through 228 New Fund Offerings (NFOs) in 2022. The data compiled by a media house also revealed collections of Rs 99,704 crore in 2021 and Rs 53,703 crore in 2020.
According to FYERS Research, the trend toward the financialisation of assets in India is evident, driven by changing consumption behaviors and the need for a higher standard of living. The COVID-19 pandemic highlighted the importance of financial planning and the creation of liquid assets for emergencies and wealth-building.
The FYERS report noted that the January-March period of 2023 saw the highest number of NFOs at 57. However, the peak fund mobilisation occurred in the July-September period, totaling Rs 22,049 crore. Additionally, 29 thematic or sectoral funds raised an aggregate of Rs 17,946 crore in 2023.
Retail investors, with an increased risk appetite for equities and awareness of products, opted for higher-risk products like thematic and sectoral funds compared to others.
Experts attribute the higher fund mobilisation through NFOs in 2023 to positive investor sentiments and strong stock market performance. The Nifty 50 index delivered a 20 per cent return in 2023, supported by earnings growth, while Nifty Midcap and Nifty Smallcap indices recorded impressive returns of 47 per cent and 56 per cent, respectively.
The mutual fund industry, overall, witnessed a net inflow of Rs 2.74 lakh crore in 2023, compared to an inflow of over Rs 71,000 crore in the previous year. Equity funds, arbitrage funds, and index funds & ETFs saw sustained investors' interest, leading to substantial inflows.
Debt schemes experienced a net outflow of Rs 46,100 crore, while equity schemes saw substantial inflows of Rs 1.62 lakh crore, closely followed by hybrid category schemes at Rs 93,208 crore.
