Outflows in debt funds drag MF assets

Suresh P Iyengar Mumbai | Updated on March 11, 2020

Gold ETFs see good inflows despite sharp run-up in prices

The asset under management of mutual funds was down two per cent last month at ₹27.22-lakh crore against ₹27.85-lakh crore logged in January on the back of ₹27,940 crore net outflow from debt fund.

Liquid fund witnessed an outflow of ₹43,825 crore last month against an inflow of ₹59,682 crore logged in January while overnight fund registered an outflow of ₹1,474 crore against inflow of ₹22,652 crore.

Despite market volatility and negative sentiment, inflows into equity schemes were up at ₹10,796 crore (₹7,877 crore).

Except for value and dividend yield fund, all segment of equity fund saw an inflow with multi- and large-cap funds registering an inflow of ₹1,625 crore (₹1,723 crore) and ₹1,607 crore (₹1,154 crore).

Inflows into mid-cap fund were down at ₹1,451 crore (₹1,798 crore) while that of small-cap was up at ₹1,498 crore (₹1,073 crore).

Other ETFs (exchange traded funds) logged a huge inflow of ₹16,344 crore (₹1,873 crore) due to Government disinvestment of shares through CPSE managed by Reliance Mutual Fund. Gold ETF attracted the highest-ever investment in recent times of ₹1,483 crore (₹202 crore) as rising yellow metal prices pushed consumers to look at gold ETFs than buying physical gold.

Marginal fall in SIP

Inflow through SIP fell marginally last month to ₹8,512 crore against ₹8,531 crore registered in January.

SIP asset under management was down at ₹3.11-lakh crore (₹3.25-lakh crore).

NS Venkatesh, Chief Executive, AMFI, said buoyancy in SIP flows is expected to continue in March, though a few institutional investors may reassess their investment strategy, given the deep correction in markets.

On the impact of YES Bank Alternative Tier-I (AT-I) bond write-off, he said, AMFI has written to RBI and SEBI stating that both equity capital and preferential allotments should be written down first before acting on AT-I bonds. The decision has already impacted overall AT-I bond market with yield of even SBI bonds going up due to growing risk attached to such bonds.

Time-bound write-off

Equity write-off will also impact mutual funds but such risks are ingrained in those scheme, he said. It is okay if the RBI writes off YES Bank AT-I bonds for a certain period of time till its financial improves, he added.

Published on March 11, 2020

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