SBI MF assets grow faster than bank deposits, crossing ₹10 lakh crore

SBI MF assets outpace bank deposits, surpassing ₹10 lakh crore.

Expert Analysis:

• Digital Platforms and Investor Preference: Digital platforms enhance accessibility, making mutual funds (MFs) the preferred choice for investors seeking growth and convenience.

• AUM Growth: Booming equity markets and a growing investment culture drove SBI Mutual Fund's AUM up 27%, reaching ₹9.14 lakh crore in the financial year ending March, from ₹7.17 lakh crore in the same period previous year (Association of Mutual Funds in India data).

• Comparison with SBI Domestic Deposits: In comparison, SBI's (the country’s largest bank) domestic deposits increased by 11% to ₹47.24 lakh crore from ₹42.53 lakh crore (SBI data).

• Year-on-Year Growth: SBI MF's AUM rose 11% in FY 23, while SBI's deposits grew by 8%.

• Milestone Achievement: SBI MF crossed ₹10 lakh crore in average AUM on June 3, driven by strong equity markets and record new fund offers.

• Investment Trend Shift: This trend indicates a shift in investor preference towards MFs, driven by higher returns, financial literacy, and investment convenience.

• Performance Comparison: SBI offers 7% on 2-3 year retail deposits, while the SBI Magnum Gilt fund and the SBI Flexi Cap delivered 8.45% and 20% returns over two years, respectively, highlighting significant performance differences.

• Impact of RBI Rate Cuts on Investment Behavior: Anil Rego of Right Horizon PMS observed a shift from bank deposits to MFs post-RBI rate cuts, emphasizing MFs' appeal despite safer but lower returns from deposits.

Factors Driving Shift to Mutual Funds: Factors driving this trend include SIPs, goal-based investing, and enhanced digital platforms enhancing MFs' convenience over traditional FDs.