Mutual Fund inflows have increased steadily over the last few years.
The demonetisation of high value currency in Nov 2016 had a major impact since people were parking huge cash in their bank savings accounts, and looking for a good option to invest.
The roll out of Goods & Service Tax (GST) also has forced the economy to go more formal leading to more flow of money into the banks.
With more money chasing mutual funds, stocks prices have gone up resulting in a bullish trend. The chart below shows the increase in the Assets Under Management. The industry has been growing at a 22% CAGR.
Notably the regular inflow through SIPs has touched a new high of Rs 6,425 crore in 2017-18. This compares to nearly Rs 44,000 crore in the 2016–17. SIP accounts grew by 70 lakh to 2.05 crore in the 2017-2018.
With such volumes no wonder the market has been made bullish, relative to earlier years.
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