Mutual fund assets dwindle 6% as debt investors cash out

Our Bureau Mumbai | Updated on July 08, 2019 Published on July 08, 2019

The assets under management of mutual funds was down 6 per cent in June to ₹24.25-lakh crore against ₹25.93-lakh crore logged in May, largely due to massive outflow from income- and debt-oriented schemes.

The series of debt defaults by large corporates has led to a net outflow of ₹1.71-lakh crore from debt and income schemes, compared to inflow of ₹70,100 crore in May, according to data released by the Association of Mutual Funds in India.

Among debt schemes, liquid funds witnessed the largest outflow of ₹1.52-lakh crore, against inflow of ₹68,583 crore in May, while overnight funds saw an outflow of ₹4,062 crore (₹2,347 crore).

Given the recent rally in the equity market, inflow into equity schemes was up at ₹7,663 crore, against ₹5,408 crore recorded in May and ₹4,609 crore in April. Investment of ₹1,835 crore and ₹1,509 crore in multi- and large-cap funds boosted overall inflows into equity-oriented schemes.

Mid- and small-cap schemes

Inflows into mid- and small-cap schemes tapered off to ₹845 crore (₹1,273 crore) and ₹927 crore (₹1,416 crore). However, inflows into equity-linked saving schemes fell marginally at ₹500 crore (₹516 crore). Investments in focussed funds slid at ₹651 crore (₹1,200 crore).

Investments through monthly systematic investment plans (SIPs) in June fell to ₹8,122 crore from ₹8,183 crore registered in May. It was ₹8,236 in April. The number of SIP accounts was up by 3.88 lakh to 2.73 crore.

NS Venkatesh, Chief Executive, AMFI, said the decisive electoral verdict, political stability and lower inflation have seen retail investors repose trust in mutual funds.

This apart, he said, spike in retail investors in equity schemes is also due to the RBI’s stance to lower the interest rates leading to possible growth in corporate earnings.

On the outflow from liquid funds, Venkatesh said, “This is a usual quarter-end phenomenon where the industry witnesses temporary redemptions from liquid funds.”

Vishal Kapoor, CEO, IDFC AMC, said the outflow from fixed income was largely due to the quarter-end phenomenon of liquid fund redemptions by corporates.

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Published on July 08, 2019
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