Year Ender 2023: The Mutual Fund Industry Adds Over 20 Million New Investment Accounts, Making 2023 A Blockbuster Year 

The Indian mutual fund industry saw a record increase in assets under management, with 19% growth and more than 20 million new investment accounts being added, helping the industry outpace its global peers. The factors that helped the industry include smartphone penetration, rising financial literacy, improving incomes, stellar stock-market returns, and an insatiable hunger for financial gains among young Indians, according to the data from Morningstar Inc.

The equity funds contributed significantly to the asset upswing as local equity funds have seen inflows for 33 straight months through November, with monthly recurring plans emerging as the most popular product, which saw an increased flow about compounded annual growth rate of more than 25% since the onset of the pandemic, with November drawing a record $2.1 billion, according to Bloomberg Intelligence.

The number of Indian mutual fund investors has reached 40 million, and the number of unique mutual fund investors in the country is over 1.4 billion.

Money managed by Indian funds makes up about 16% of the size of the South Asian economy, with the proportion having doubled in the last 10 years, Amarjeet Singh, a whole-time member of the Securities and Exchange Board of India—the markets regulator—said at a conference in Mumbai last month, according to a report by LiveMint.

The industry veterans foresee mutual funds garnering a big chunk of households’ financial assets, which was under 9% as of March this year, versus about 45% for bank deposits, in the coming years to come.