MF asset slips 4% in September as inflow into equity, debt fund slows down

The asset under management of mutual fund industry was down 4 per cent last month at Rs 24.50 lakh crore against Rs 25.48 lakh crore logged in August largely due to outflow from liquid funds and inflow into equity funds dipping to four-month low.

Of the overall net outflow of Rs 1.52 lakh crore of the industry, the debt-oriented funds alone saw an outflow of Rs 1.58 lakh crore. Among debt-oriented funds, liquid funds registered an outflow of Rs 1.41 lakh crore while ultra short and short duration fund investors pulled out Rs 6,783 crore and Rs 6,278 crore.

Inflows into equity funds plunged to Rs 6,609 crore against Rs 9,152 core recorded in August. The lowest equity inflow in the fiscal was Rs 5,408 crore in May.

NS Venkatesh, CEO, AMFI said the outflow from debt funds was an annual trend with corporates pulling out funds for meeting their advance tax obligation and banks cutting down their exposure to maintain enough liquidity in the system. Inflows through Systematic Investment Plan also tapered off at Rs 8,263 crore in September against Rs 8,271 crore.

Given the current trend, Venkatesh said the inflows annually through SIP route alone will be close to Rs 1 lakh crore, three times that of annual foreign portfolio investments. SIP account was at 2.83 crore last month against 2.81 crore in August.

Retail AUM increased to Rs 11.23 lakh crore against Rs 10.71 lakh crore in August. The overall folio count of the industry was up at 11.23 crore (10.71 crore).

Going forward, he said mutual funds should see upward trend if equity markets start showing growth and retail investors have reposed faith in mutual fund industry. The regulator SEBI has reacted quickly to mitigate the risks in debt market investments. The new SIP account opening are showing the robust growth, he said. Inflows into gold Exchange Traded Fund slowed down to Rs 44 crore against Rs 145 crore in August.