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<div type="image" title="Data from RBI suggests that the outstanding amount on gold loans has swelled from Rs 85,009 crore in September 2022 to Rs 1,47,081 crore in September 2024." msid="115250619" hostid="261" sizebytes="118350" caption="&amp;lt;p&amp;gt;Data from RBI suggests that the outstanding amount on gold loans has swelled from Rs 85,009 crore in September 2022 to Rs 1,47,081 crore in September 2024.&amp;lt;/p&amp;gt;"></div> “Ye le beta, humare khaandani sone ke gehne. Ise girvi rakhva de, shayad kuch paise aa jaye ghar main.” How many times have we seen similar dialogues repeat itself in Bollywood films of the 70s and 80s—abject poverty and a frail-looking old mother pleading to her son to pawn the family’s heirloom <keyword id="18712" type="General" weightage="20" keywordseo="gold" source="Orion">gold</keyword> ornaments to a jeweller, all to get a few bucks? Well, if you’d ask that son in 2024, he’d rather hit the loan button on his <keyword id="19977340" type="General" weightage="20" keywordseo="demat" source="keywords">Demat</keyword> account than pawn his mother’s gold jewellery. Given how Indians are rapidly resorting to taking loans against their investments in shares and mutual funds, these might as well be a cherished family heirloom in today’s time. Fair warning though; it's not as if gold and loans against it are going down in India’s lending scene. It's very much the opposite, shining brighter than ever! The secured loan category is having its time in the spotlight, and people are certainly looking beyond land and property to get their hands on some extra monies! But what is funding the steep rise behind these loans? And are they as failsafe and secure as they’re made out to be? We decode for you in this week’s Simply Put. <h2>The great Indian pawning party</h2>Pawning one’s gold has been, by far, the OG Indian financial move to get a loan. That continues well into 2024, and apparently, more so when India decides to wed and celebrate! Data from <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> suggests that the outstanding amount on gold loans has swelled from Rs 85,009 crore in September 2022 to Rs 1,47,081 crore in September 2024. It looks like Gold took the motto of rise and shine too seriously! Table 1: Growth in gold loans <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Amount (In Rs crore) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">September 2022 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">85,009 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">March 2023 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">89,370 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">September 2023 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">97,426 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">March 2024 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,02,562 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">September 2024 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,47,081 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> Source: RBI data While the world continues to be riled up in multiple geopolitical crises in 2024, gold has been making merry of these tough times. Thus far this year, domestic gold prices have grown by 23%, outperforming benchmark indices like Nifty and Sensex by a mile, which have gone up by 9.85% and 8.86%, respectively. The growth in gold loan disbursal rates month on month this year could also put Nifty and Sensex’s growth to shame. In just September 2024, gold loans grew an astounding 51%, up from 40.9% in August, 30.5% in June, and just 14.8% in March. <h2>Hey, wait up for me, says <keyword id="23953567" type="General" weightage="20" keywordseo="las" source="keywords">LAS</keyword></h2>In lockstep with the elder, gold loan sibling, advances against shares and bonds have also been inching up since 2022. Data from RBI (Reserve Bank of India) notes that as of September 2022, the outstanding quantum of loans that were taken against shares (LAS) and bonds stood at Rs 7,397.94 crores. This inched up to Rs 7,764 crore in September 2023. Come 2024, and it looked like this was LAS’ time to shine. Loans swiftly skyrocketed, with outstanding loans in this category going up from Rs 8,492 crore in March 2022 to a staggering Rs 9,546 crore at the end of September 2024. Naturally, the smoke of LAS has its fire in the record inflows that Indians are pouring into the stock market and mutual funds month on month. Per AMFI (<keyword id="20090034" type="General" weightage="20" keywordseo="association-of-mutual-funds" source="keywords">Association of Mutual Funds</keyword> in India), the net AUM (assets under management) of India’s mutual fund industry grew to Rs 67,25,614.61 crores in October 2024, up from Rs 67,09,259.24 crores in September 2024. Even the number of retail mutual fund folios, which include equity, hybrid, and solution-oriented mutual funds, burgeoned to 17,23,52,296 in October, as compared to 16,81,61,366 in September. The same goes for stock investments in India, where the number of new demat accounts that are added every month just simply refuses to climb down. As of last month, total demat accounts in the country stood at 17.9 crore, which is more than the entire population of full-fledged nations like Japan (12.45 crore), Russia (14.38 crore), and Bangladesh (17.3 crore). In fact, since February this year, the monthly growth of LAS has been hitting double digits. From 11.3% in March to 21.6% in May to 26.8% in August, growth in LAS has been exceptional, hitting 22.9% in September this year. For context, monthly growth in the LAS segment was at a mere 5% in September 2023. <h2>What's driving the growth?</h2>It's a win-win for both the bank and the customer. Customers love them because LAS is available at a lower interest rate compared to unsecured personal loans. You can get a loan at an interest rate of anywhere between 9 and 12% by pledging your gold, MF units, or shares. Compare this to over 10-28% rates, which is the range where unsecured personal loans charge interest. Banks love <keyword id="827883" type="General" weightage="100" keywordseo="secured-loans" source="Orion">secured loans</keyword> since they are well-secured. In case you default on paying back, the bank can sell off your gold, shares, or mutual fund units to recover the amount. This takes a lot of stress off the banks, which are already dealing with secured loans’ riskier sibling-unsecured lending. High NPAs (non-performing assets) and non-payments in the unsecured borrowing space have already put RBI on red alert, which is why the apex bank is tightening the screws on unsecured lending, which was well on its way to becoming a ticking time bomb. As a result, credit growth has moderated to 12.8% YoY in October, as against the 19.3% rise recorded in the year-ago period. Yet it's not like the banks won't feel the heat. Analysts at Nomura note that personal loan delinquencies in India that have been overdue by over 90 days rose to 5.1% in the last financial year, as opposed to just 3.9% in the year prior. <h2>How does it work?</h2>Both these loans work on a similar principle: Your loan amount is equal to a certain percentage of the actual market value of your asset. This is known as the <keyword id="20051485" type="General" weightage="20" keywordseo="ltv" source="keywords">LTV</keyword> (loan-to-value ratio). In the case of gold and debt mutual funds, RBI mandates that this LTV be about 75-80%. So, for every Rs 100 of gold or debt mutual fund unit you pledge, your maximum loan amount cannot exceed Rs 80. If you pledge gold, which has a market value of Rs 10 lakh, you can take a loan of up to Rs 8,00,000. In the case of shares and mutual fund units, this limit is set at 50%. So, your shares worth Rs 5,00,000 can only get you a loan worth Rs 2,50,000. But the bright side? You can continue earning returns on your investments and pay interest only on the amount you use, since this loan works as an overdraft facility. <h2>Super safe, you say?</h2>Interest rates on both of these loans are very much dependent on the market value of the asset, which wildly fluctuates on a day-to-day basis. So, in case the value of your asset falls, you’ll have to keep a margin or more of the same asset in order to continue with the loan and maintain the LTV balance. Failure to do so could mean the bank can even sell off your asset. Says financial planner Nema Chaya Buch. “Yes, LAS offers easy availability of funds since these loans come with a lower interest rate as compared to personal loans. Also, you continue to earn average returns of 10–13% on your equity investments. But the downside is, in case of emergency, those pledged securities cannot be sold. Also, if the equity market goes down, then the bank may ask for additional collateral. Raghvendra Nath, MD, Ladderup Wealth Management notes that taking a LAS is best when the value of your securities has appreciated significantly. “This allows you to maximize the loan amount based on your collateral while also addressing financial needs without having to liquidate your investment portfolio. However, there are notable disadvantages to consider. The market risk is significant; a substantial decline in market value could lead to margin calls, which may incur fees and charges if there are delays or prepayments, ultimately increasing the effective cost of borrowing. Furthermore, failure to make timely payments could result in the loss of your assets.”. Umesh Mohanan, ED &amp; CEO, of Indel Money, cautions that one should have a sufficient quantity of gold to get the loan amount one wants. "According to the current RBI rules, the loan applicant/borrower can draw up to 75% of the total market value of the collateral/gold jewellery. So, always carry a sufficient quantity of gold based on one’s loan requirement. “The most important thing is that the valuation of the gold depends on the purity of the gold. If the borrower pledges gold with higher purity, such as 24 carats or 22 carats, he will get the maximum loan amount," he adds.

Simply Put: Secured Loans 2.0 — why more and more Indians are turning to gold, shares and mutual funds to get loans

Markets regulator <keyword id="19901201" type="General" weightage="100" keywordseo="Sebi" source="keywords" meta.keywordsubtype="org" meta.entityname="Sebi" meta.hostid="153" meta.entityid="Sebi">SEBI</keyword> has asked the <keyword id="20677983" type="General" weightage="20" keywordseo="mutual-fund-industry" source="keywords">mutual fund industry</keyword> to proactively conduct stress tests, a key component of <keyword id="20383727" type="General" weightage="20" keywordseo="risk-management" source="keywords">risk management</keyword> for the financial sector, which will help strengthen the ecosystem, its whole-time member Ananth Narayan Gopalakrishnan said on Friday. The regulator's stress testing emphasizes the need to assess and manage liquidity risks, especially in small and midcap equity schemes. Speaking at a mutual fund event, Gopalakrishnan highlighted the importance of modelling stress scenarios not just for individual schemes or fund houses, but for the entire mutual fund ecosystem. "It is also important to model stress scenarios for the entire composite mutual fund ecosystem. I would strongly encourage the industry and <keyword id="20090036" type="General" weightage="20" keywordseo="AMFI" source="keywords" meta.keywordsubtype="org" meta.entityname="AMFI" meta.hostid="153" meta.entityid="AMFI">AMFI</keyword> to take the lead and proactively conduct objective and credible industry wide stress tests. themselves," Gopalakrishnan said. He also emphasized the need to find better ways to communicate the risks associated with different mutual fund schemes. The SEBI official mentioned that while the current risk measurement system is straightforward and has had a significant impact, it doesn't fully capture the differences in risks among various investment schemes. According to him, many schemes are just labelled as high risk, even though they have different kinds of risks. The goal is to improve this system to better reflect those differences, while keeping it simple and easy to understand. One possible approach is to consider the portfolio's volatility and liquidity from stress tests to give a clearer picture. "While ensuring simplicity and ease of understanding remains a key objective, perhaps the underlying volatility of the portfolio along with the liquidity of the portfolio from stress tests could be used to provide better colour all around," he added. This comes at a time when the holdings of mutual funds by <keyword id="20234284" type="General" weightage="20" keywordseo="domestic-institutional-investors" source="keywords">Domestic Institutional Investors</keyword> (DIIs) and individuals have risen from about 54.3% of free float of all mid cap and small cap companies, as of March 2020 to 60.6% as of March 2024. Several fund houses have proactively stopped lump sum investments in some small-cap schemes and also capped the amount that can be invested through <keyword id="20675888" type="General" weightage="20" keywordseo="systematic-investment-plan" source="keywords">Systematic Investment Plan</keyword> (SIP) into small-cap schemes. He also highlighted the potential mismatch between the demand for paper and the supply of fresh paper coming into the ecosystem. Gopalakrishnan said the industry can make more progress in streamlining operations and improving efficiency for investors. "At a time when instantaneous fund transfers have become ubiquitous in our country, perhaps we should look to improve our internal processes and the security settlement ecosystem, to ensure that funds are passed on to investors on the day of the settlement itself, rather than a day after or two days after," he added. Over the last few years, the mutual fund industry has made impressive strides, and is now playing a crucial role in channeling financial savings towards risk capital formation. This was driven by stable macros, increased formalization, robust corporate earnings, digitisation and user friendly access. Moreover, the number of mutual fund investors has grown significantly from about 2 crore as of March 2019 to nearly 4.7 crore as of June 2024, an impressive compounded annual growth rate of 18% during that period. Gopalakrishnan mentioned that several exciting initiatives are in the works, developed with input from all stakeholders. These include a proposed low-ticket SIP, further breaking down regular SIPs into smaller, more accessible units (sachetisation and tokenization), and the introduction of "mutual funds lite" regulations. These new regulations will simplify rules for passively managed funds, reducing the compliance burden and encouraging competition and innovation. Additionally, a new class of higher-risk schemes is proposed for investors with a greater capacity to handle risk.

SEBI asks mutual fund industry to proactively conduct stress test

Focused <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword>, which invest in a concentrated portfolio of <keyword id="19905382" type="General" weightage="20" keywordseo="stocks" source="keywords">stocks</keyword>, are gaining traction among investors with the <keyword id="22748135" type="General" weightage="20" keywordseo="asset-base" source="keywords">asset base</keyword> of the category growing to Rs 1.43 lakh crore in three months ended June 2024, marking an increase of 31% from a year ago. Interestingly, some of the focused funds offered by the mutual fund houses such as <keyword id="22748136" type="General" weightage="20" keywordseo="Invesco-India-Focused-Fund" source="keywords" meta.keywordsubtype="org" meta.entityname="Invesco India Focused Fund" meta.hostid="261" meta.entityid="Invesco India Focused Fund">Invesco India Focused Fund</keyword>, Mahindra Manulife Focused Fund, JM Focused Fund, and <keyword id="19896378" type="General" weightage="20" keywordseo="hdfc" source="keywords">HDFC</keyword> Focused 30 Fund delivered a remarkable return of 40-60% in the past year, industry data showed. Focused funds are a type of mutual fund where the fund manager selects a concentrated portfolio of stocks, typically limited to a maximum of 30 due to regulatory constraints. This requires the fund manager to be highly skilled in stock selection, as they need to identify the best investment opportunities across the market without bias toward any specific market cap or sector. According to data from the <keyword id="20090034" type="General" weightage="20" keywordseo="association-of-mutual-funds" source="keywords">Association of Mutual Funds</keyword> in India (Amfi), the assets under management (AUM) of the focused funds were at Rs 1.43 lakh crore in the June quarter 2024-25 as compared to Rs 1.09 lakh crore in April-June FY24. This growth highlights the appeal of focused funds as an alternative to portfolio management services (<keyword id="19950020" type="General" weightage="20" keywordseo="pms" source="keywords">PMS</keyword>), especially with recent tax changes that make PMS less attractive due to higher costs and tax implications, Feroze Azeez, Deputy CEO, of Anand Rathi Wealth Ltd, said. "With the increase in taxation on both small-term capital gain tax and long-term capital gain tax, PMS portfolios are expected to see a drop in post-tax returns. For example, a PMS portfolio generating a pre-tax return of 14 % could see post-tax returns drop from 11.73 % to 11.29 %. This shift could lead to fund managers churning portfolios less frequently, which in turn will be affecting returns for investors," he added. Focused funds follow a similar concentrated portfolio strategy where the fund manager picks the top stocks and offers flexibility across market caps. Thus, becoming a more attractive option for investors looking to optimize their returns. Industry experts recommend investing in focused funds through systematic investment plans (SIPs) as a smart strategy in the current market environment of sector rotation and high valuations. Since these funds invest in a small number of stocks, SIPs can help reduce risk by spreading out investments over time. Overall, there are 31 focused schemes offered by different mutual fund houses in the category. These schemes have given returns of 19-60% in the last one year. In terms of returns, smaller funds have performed exceptionally well. The Invesco India Focused Fund delivered a remarkable return of over 60% in the past year, while Mahindra Manulife Focused Fund provided around 50% returns and JM Focused Fund offered a return of 45% during the period. With a corpus of Rs 1,552 crore as of June 2024, Mahindra Manulife Focused Fund has consistently performed well, securing the second rank for 1, 2, and 3-year periods. The fund delivered returns of 50%, 32%, and 26% over these periods, respectively. HDFC Focused 30 Fund achieved the top rank over the 3 years with a return of 28.63 %, while JM Focused Fund secured the third rank with a 25 % return during the same period. "The success of focused funds underscores the importance of skilled fund management and strategic stock selection," an industry expert said. Focused funds opt for a more targeted strategy rather than the broad diversification typical of traditional mutual funds. This approach helps fund managers make investments in a carefully selected group of stocks, reflecting their strongest investment beliefs. The concentrated nature of these portfolios requires careful selection of each stock, as the fund's performance heavily depends on these choices. Although these funds hold a limited number of stocks, they are structured to be sufficiently diversified to effectively manage risk. Overall, the assets of the equity mutual funds rose to Rs 27.6 lakh crore in June 2024 from Rs 17.43 lakh crore in June 2023.

Focused MFs' asset base rises 31% to Rs 1.43 lakh cr in June qtr; up to 60% returns last year

A research report by the <keyword id="19934368" type="General" weightage="100" keywordseo="state-bank-of-india" source="keywords">State Bank of India</keyword> (SBI) highlights the continuous upward trend in credit growth in Indian <keyword id="19934118" type="General" weightage="20" keywordseo="banks" source="keywords">banks</keyword>, which is outpacing the growth of deposits. This trend persists even as Indian households have substantially increased their investments in <keyword id="19929240" type="General" weightage="20" keywordseo="mutual-funds" source="keywords">mutual funds</keyword> and equities. For the last several months, investments of over Rs 21,000 crore are being done in mutual funds. Last month, during an event, <keyword id="20151998" type="General" weightage="20" keywordseo="RBI-Governor" source="keywords">RBI Governor</keyword> <keyword id="19913110" type="General" weightage="20" keywordseo="shaktikanta-das" source="keywords">Shaktikanta Das</keyword> noted that households are opting for capital markets over banks to invest or park their savings. However, the <keyword id="20352499" type="General" weightage="20" keywordseo="SBI-report" source="keywords">SBI report</keyword> states, "Latest fortnightly credit and deposit growth number shows credit growth continues to outpace deposit, though moderated from last year growth of 16.2 percent (June'23 YoY)." Specifically, for the fortnight ending July 12, 2024 the report noted that the credit growth for All Scheduled Commercial Banks stood at 14 per cent on a year-on-year basis, while deposit growth was reported at 11.3 per cent. Furthermore, the report also served a significant increase in credit to the industrial sector, which rose from 5.1 percent in March 2023 to 8.4 percent in March 2024, and recorded 8.1 percent growth in June 2024 year-on-year. This indicates a robust demand for credit within the industrial sector. Despite big savings going towards the capital markets, banks have managed to gather an incremental deposit of Rs 7.02 lakh crore in the year-to-date (YTD) period ending July 12, 2024. In comparison, the incremental credit extended by the banks amounted to Rs 3.80 lakh crore during the same period. This discrepancy illustrates that while credit growth is substantial, deposit growth remains essential to maintain balance. Additionally, the report highlighted that banks' reliance on high-cost deposits, such as Certificates of Deposit (CDs), has more than tripled. This increase is a response to the need to match the rising credit demand, showing how banks are adjusting their funding strategies to accommodate the growing demand for loans. <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> Governor stated last month, "While bank deposits continue to remain dominant as a percentage of the financial assets owned by the households, their share has been declining, with households increasingly allocating their savings to Mutual Funds, Insurance Funds, and Pension Funds."

Credit growth in banks continues to exceed deposits, says new SBI report

<keyword id="19895437" type="General" weightage="20" keywordseo="investment" source="keywords">Investment</keyword> in <keyword id="20300870" type="General" weightage="100" keywordseo="equity-mutual-funds" source="keywords">equity mutual funds</keyword> surged over five-fold to Rs 94,151 crore in the June 2024 quarter against Rs 18,358 crore a year ago, driven by a strong <keyword id="21477327" type="General" weightage="20" keywordseo="economic-environment" source="keywords">economic environment</keyword>, supportive <keyword id="22575274" type="General" weightage="20" keywordseo="government-fiscal-policies" source="keywords">government fiscal policies</keyword>, <keyword id="19900618" type="General" weightage="20" keywordseo="investors" source="keywords">investors</keyword> confidence and robust <keyword id="21990858" type="General" weightage="20" keywordseo="stock-return" source="keywords">stock return</keyword>. This has also pushed the industry's assets under management (<keyword id="20019621" type="General" weightage="20" keywordseo="AUM" source="keywords">AUM</keyword>) by 59 per cent to Rs 27.68 lakh crore in June from Rs 17.43 lakh crore a year ago, data from the Association of Mutual Funds in India (<keyword id="20090036" type="General" weightage="20" keywordseo="AMFI" source="keywords">AMFI</keyword>) showed. The robust gain in the asset base was also replicated in the growth of investors in equity mutual funds, with the number of folios closing at 13.3 crore, adding an investor base of over 3 crore. The significant gain in equity folios indicates broader participation across investor segments, driven by improved <keyword id="19929245" type="General" weightage="20" keywordseo="financial-literacy" source="keywords">financial literacy</keyword> and accessible investment platforms, Trivesh D, COO of stock trading platform Tradejini, told PTI. According to the AMFI data, equity-oriented mutual fund schemes invested Rs 94,151 crore in the quarter ended June 2024. This comprises Rs 18,917 crore in April, Rs 34,697 crore in May and Rs 40,537 crore in June. The investment in equity-oriented mutual funds jumped five-fold to Rs 94,151 crore in the June quarter from Rs 18,358 crore in the quarter ended June 2023 and increased 32 per cent Rs 71,280 crore witnessed in the preceding March 2024 quarter. "The confluence of political stability, supportive government policies, and a favourable economic environment has significantly contributed to the impressive inflows into equity mutual funds, signalling a positive outlook for the sector," Trivesh said. Strong macroeconomic fundamentals, bolstered by supportive government fiscal policies like higher-than-budgeted tax collection growth, reduced revenue expenditures, and increased capital spending have helped in increasing the allocation to equity mutual funds, Feroze Azeez, Deputy CEO, Anand Rathi Wealth, told PTI. He further said that investors' confidence in the markets and historically strong returns given by Indian equities with relatively low risk also helped investors to move towards equity mutual funds. Additionally, the shift was further fuelled by a transition from traditional investments like deposits to mutual funds in pursuit of higher returns. "The long-term outlook remains positive, with expectations of 11-13 per cent annual returns for Indian equities, and equity mutual funds potentially delivering even higher returns," Azeez said. Within the equity segment, sectoral or thematic category attracted Rs 46,731 crore during the quarter under review, followed by Multi-cap (Rs 10,077 crore), Flexicap (Rs 8,387 crore), Large &amp; Midcaps (Rs 7,948 crore), Smallcap (Rs 7,197 crore) and Midcap (Rs 6,927 crore). Large-cap funds witnessed an infusion of Rs 1,991 crore during the April-June quarter of the current financial year (FY25). Moreover, inflows into the systematic investment plan (<keyword id="19956399" type="General" weightage="20" keywordseo="SIP" source="keywords">SIP</keyword>) have been rising continuously for the past several months. The monthly SIP contributions crossed the Rs 21,000 crore mark in June, with the total inflow reaching an all-time high of Rs 21,262 crore. This shows investors' commitment to disciplined and long-term investing. The fund infusion through the SIP route was Rs 62,537 crore in the April-June quarter of FY25, a remarkable surge from Rs 43,211 crore in the same quarter preceding the fiscal.

Investment in equity mutual funds surge 5-fold to Rs 94,151 cr in June qtr amid robust eco environment

<keyword id="19896016" type="General" weightage="20" keywordseo="new-delhi" source="keywords">New Delhi</keyword>, <keyword id="20848502" type="General" weightage="20" keywordseo="mutual-fund-distributors" source="keywords">Mutual fund distributors</keyword> will now have the opportunity to receive trail commissions from <keyword id="20030502" type="General" weightage="20" keywordseo="asset-management-companies" source="keywords">Asset Management Companies</keyword> (AMCs) for assets transferred by an investor from one distributor to another. This change follows numerous requests from Mutual Fund Distributors (MFDs) to review the current AMFI Registration Number (ARN) transfer norms. These norms currently prevent AMCs from paying trail commissions to the new distributor when an investor transfers their assets to a new <keyword id="20094258" type="General" weightage="20" keywordseo="mfd" source="keywords">MFD</keyword>. In a communication to its members on Tuesday, <keyword id="20090034" type="General" weightage="20" keywordseo="association-of-mutual-funds" source="keywords">Association of Mutual Funds</keyword> in India (Amfi) permitted AMCs to pay trail commission to distributors in case a client transfers his assets from one distributor to another. However, AMCs can only pay trail commission after cooling off period of six months from the date of transfer of assets by investors. "In respect of change in distributor/ ARN code initiated by the investor, the AMCs may consider making payment of trail commission to the transferee distributor after a cooling off period of six months from the change of distributor code in the unitholder database," the industry body said. Further, It said that the payment of commission to the new (transferee) distributor would be based on the lower of the commission rate of the transferor and the transferee distributor. The mutual fund body further clarified that apart from trail commission, no other payments of any kind, including incentives, will be made regarding changes in the distributor. The industry body Amfi noted that the current ARN rule was introduced over a decade ago to curb certain market practices prevailing then, which may no longer be prevalent, and also since the transferee mutual fund distributor provides the same level of support and service to the concerned investors on the transferred assets.

You Searched For "mutual fund industry" and got 6 results

Simply Put: Secured Loans 2.0 — why more and more Indians are turning to gold, shares and mutual funds to get loans

Ira Alok Puranik

SEBI asks mutual fund industry to proactively conduct stress test

PTI

Focused MFs' asset base rises 31% to Rs 1.43 lakh cr in June qtr; up to 60% returns last year

PTI

Credit growth in banks continues to exceed deposits, says new SBI report

ANI

Investment in equity mutual funds surge 5-fold to Rs 94,151 cr in June qtr amid robust eco environment

PTI

Mutual Fund distributors to get trail commissions for investor asset transfers

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