The market volatility in November saw the equity assets under management (AUM) of the mutual fund industry decline by around eight per cent. As on November 30, the equity AUM of the industry stood at Rs 1.48 lakh crore down from Rs 1.61 lakh crore last month. This is the lowest that the equity AUM has gone down to in 30 months.
The market volatility has driven away investors, say fund analysts. “Even though the number of redemptions has come down substantially, lump-sum investments in equity funds have stopped completely resulting in the erosion of the equity AUM.
“Not many risks are being taken by investors and they are choosing to stay away from the equity markets for now. SIP inflows have continued though,” said Mr Hiren Dhakan, Associate Fund Manager, Bonanza Portfolio. The CNX Nifty, which is the benchmark for most equity mutual funds, declined by around eight per cent in the month of November.
Huge drop
As on November 30, the assets under management of the industry stood at Rs 6.81 lakh crore, down by Rs 13,782 crore from the previous month's AUM of Rs 6.95 lakh crore. At Rs 1.48 lakh crore, the equity AUM constitutes 21.76 per cent of the total assets under management. The average ratio for the last 30 months is 24.38 per cent.
All the equity-related categories saw a huge drop in their AUM. The exchange-traded funds (other than gold) category, fell by 8.18 per cent, followed by the equity and balanced funds category which fell by 8.16 and 7.92 per cent, respectively. The ELSS-Equity category of funds also declined by 7.57 per cent to Rs 21,684 crore.
Income funds which constitute the largest chunk of the industry AUM — 45.92 per cent — declined marginally by 0.5 per cent to Rs 3.13 lakh crore.
Gold shines
The category that saw the highest rise was that of gold ETFs. This has seen growing popularity among investors given the market volatility and uncertainty. Gold ETF AUM rose by 5.26 per cent to Rs 9568 crore. The only other category which saw an increase in inflows was liquid and money market funds. The AUM of this segment was up 2.44 per cent at Rs 1.66 lakh crore.