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The overall asset under management of the mutual fund industry fell three per cent for the first time in the last one year to ₹37.56-lakh crore in February against ₹38.91-lakh crore logged in the previous month largely due to mark-to-market valuation write down in equity and outflow in debt funds.
However, inflow into equity mutual funds increased to ₹19,705 crore last month against ₹14,888 crore in January as investors used the fall in market valuation to make fresh investments. as per Association of Mutual Funds in India data released on Wednesdy
Despite higher inflows, overall equity AUM fell to ₹12.94-lakh crore against ₹13.38-lakh crore logged in January due to mark-to-market losses amid the turbulence caused by the ongoing Russia-Ukraine conflict.
Interestingly, all the categories of equity schemes saw inflow with flexi cap, thematic and large cap funds registering highest inflow of ₹3,874 crore, ₹3,441 crore and ₹2,339 crore while large and mid-cap funds attracted investment of ₹2,036 crore.
Except for Arbitrage funds, all hybrid schemes registered inflow with balanced advantage funds topping the table with fresh investment of ₹2,118 crore.
Kavitha Krishnan, Senior Analyst, Morningstar India said equity mutual funds have seen a net inflow of ₹1,45,050 crore in last one year ended February against an outflow of ₹23,359 crore registered in the same period previous year.
The increasing investor interest in equity is evident from the fact that the industry has added 16.43 lakh new folios in last two months, she said.
Debt funds saw an outflow of ₹8,274 crore against an inflow of ₹5,088 crore in January and the debt asset under management fell to ₹14.09 lakh crore (₹14.13 lakh crore).
Aashwin Dugal, Co-Chief Business Officer, Nippon India Mutual Fund said the US Fed action and policy normalisation continued to weigh on short term yields leading to redemptions from ultra-short and short term funds mainly led by corporate investors.
SIP inflows dipped marginally to ₹11,437 crore in February against ₹11,516 crore logged in the previous month largely due to market volatility. Retail AUM, too, slipped to ₹18.07-lakh crore against ₹18.55-lakh crore registered in January.
Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC, said, in the current times of geo-political risks where markets have corrected sharply, domestic investors have made more allocation to equity, indicating their positive change towards this asset class.
‘Economy well-poised’
NS Venkatesh, CEO, AMFI, said the fall in AUM was largely due to the geopolitical issue and will bounce back once the war between Russia and Ukraine comes to an end. Indian economy is in a much better position compared to other countries as inflation is not wildly out of control and the rise in crude oil should come under control once the war ends, he added.
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