Markets

Mutual fund assets up 3% even as equity inflows decline by 15%

Suresh P. Iyengar Mumbai | Updated on June 08, 2020

Debt-oriented funds see ₹63,600-crore inflows against the overall ₹70,813-crore

Inflows into equity schemes of mutual funds plunged for the second consecutive month and was down 15 per cent at ₹5,257 crore in May against ₹6,213 crore logged in April. Huge volatility in the stock market and lacklustre returns had forced many investors to discontinue systematic investment plan in equity.

Multi-cap fund registered the sharpest fall of ₹759 crore (₹1,240 crore) while that of sectoral and thematic fund plunged to ₹197 crore (₹422 crore). Large cap fund dipped to ₹1,556 crore (₹1,691 crore). Overall equity AUM was down at ₹6.50 lakh crore (₹6.60 lakh crore).

Inflows into hybrid schemes increased to ₹8,652 crore (₹4,204 crore) on the back of ₹10,806 crore (₹6,587 crore) in arbitrage schemes.

Overall, the AUM of mutual fund industry was up three per cent in May at ₹24.54 lakh crore against ₹23.93 lakh logged in April, largely due to an higher flow in debt oriented funds.

 

In fact, an inflows of ₹63,600 crore into debt oriented fund made up for the bulk of fresh investment of ₹70,813 crore witnessed in May.

Asset in debt schemes increased to ₹11.5 lakh-crore against ₹10.74 lakh-crore in April due to inflow of ₹61,870 crore in liquid fund, ₹8,873 crore in banking and PSU Fund and ₹5,010 crore in money market fund.

Overnight funds

However, overnight funds witnessed an outflow of ₹15,880 crore while credit risk and medium duration funds saw an outflow of ₹5,173 crore and ₹1,519 crore.

Investments through systematic investment plan was down for the second month in a row and dipped 3 per cent in May to ₹8,123 crore (₹8,376 core). The SIP asset increased marginally to ₹2.76 lakh-crore (₹2.75 lakh crore).

NS Venkatesh, CEO, Association of Mutual Funds in India, said despite fall in investment through SIP, the number of new accounts opened is higher and overall inflows is still above the ₹8,000-crore-mark.

Kaustubh Belapurkar, Director, Morningstar India, said inflows into equity funds, while lower than previous months, continue to remain positive largely driven by SIP inflows. Investors continue to prefer large- and multi-cap funds given the market volatility and uncertain economic environment due to the Covid pandemic.

Published on June 08, 2020

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