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The assets under management of the mutual fund industry has recorded a flattish growth of just 1 per cent in July to ₹23.05 lakh crore against ₹22.86 lakh crore logged in June due to large redemption from liquid and debt funds.
The AUM of income funds was down marginally at ₹7.59 lakh crore against ₹7.6 lakh crore logged in June while that of equity schemes was up at ₹6.84 lakh crore (6.47 lakh crore), according to data released by the Association of Mutual Funds in India (AMFI) on Tuesday.
Assets of liquid and money market schemes slipped to ₹4.28 lakh crore (₹4.57 lakh crore), while that of balanced funds increased to ₹1.81 lakh crore (₹1.74 lakh crore). Gold ETF assets were down at ₹4,408 crore (₹4,567 crore), even as other ETFs assets climbed to ₹89,765 crore (₹88,122 crore).
NS Venkatesh, CEO, AMFI, told BusinessLine that the outflow from income and liquid funds was due to expectations of increase in repo rates ahead of the RBI’s credit policy.
‘Temporary phenomenon’
“I believe the redemption from debt funds is a temporary phenomenon and the money pulled out from long-duration funds will be ploughed back into shorter-term mutual fund schemes this month,” he said.
The bigger story is retail investors continue to repose faith in mutual funds and retail AUM was up 5 per cent at ₹10.09 lakh crore, against ₹9.61 lakh crore in June, he added.
Income funds witnessed a net outflow of ₹7,950 crore against outflow of ₹23,119 crore in June, while outflow from liquid and money market funds was ₹31,141 crore, against inflow of ₹52,104 crore earlier.
Despite bullish equity market sentiments, inflow into equity funds fell to ₹8,512 crore (₹8,794 crore) and that of arbitrage funds was at ₹1,133 crore against outflow of ₹1,423 crore in June, while equity-linked schemes saw higher fresh fund-flow of ₹940 crore against ₹866 crore.
The benchmark Sensex was up 2,342 points or 7 per cent at 37,606 on July 31 against 35,264 on July 2.
Folios continue to swell
The overall folios in the mutual fund industry registered a growth for the 50th month in a row in July. It was up at 7.55 lakh crore last month, against 7.46 lakh crore in June. Retail folios climbed to 6.31 lakh crore (6.22 lakh crore).
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