MFs net Rs 1 lakh crore via new funds in FY22

NEW DELHI: Riding on retail investors’ interest and a sharp rally in equity markets, asset management companies (AMCs) launched 176 new fund offerings (NFOs) in FY22, garnering Rs 1. 08 lakh crore. But with liquidity tightening, interest rates on the rise, stock market consolidation in progress and the return to office, there could be subdued interest in NFOs in future.

The FY22 figure was way higher than FY21 when 84 NFOs were floated and Rs 42,038 crore mobilised, according to data compiled by Morningstar India. Most of the schemes were launched in the index and ETF category, to support both — passive and active investors. Usually, NFOs come during a surging market when investor sentiment is high and optimistic.

The stock market along with the positive investor sentiments kept surging post March 2020, leading to the launch of a higher number of NFOs. The NFOs were floated to capitalise on the mood of investors and attract their investment as they were willing to invest at that time.

While the fixed maturity plans (FMPs) category could see considerable launches, the same cannot be expected from other categories, Gopal Kavalireddi, head of research at broking platform Fyers, said. Also, almost all AMCs have launched new schemes across most categories, thereby filling the earlier existing product gaps that was created post-recategorisation, he said.