The mutual fund industry grew by about 16 per cent over March to Rs 6.8 lakh crore in April.

Debt funds led this rise in the assets under management (AUM). Of this, income funds increased 6.5 per cent, to Rs 3.09 lakh crore and liquid and money market funds nearly doubled.

Liquid funds now account for about a fourth of the industry AUM.

“This is a seasonal phenomenon as every year during March liquid funds see heavy withdrawals by banks and corporates on account of various factors like advance tax outflows, profit booking, and capital adequacy norms. Also, in the beginning of the new fiscal the funds are likely to flow back,” said the head of fixed income of an Indian mutual fund house.

Thirty-four new income funds were launched in April taking the total number of income funds in the industry to 762. Incremental inflow in April was Rs 4,434 crore.

Equity AUM fell 1.4 per cent to Rs 1.56 lakh crore on tepid market action.

Subdued sentiment

“Markets are subdued and so is the investor sentiment. While valuations are looking attractive, it is difficult to convince investors to put money into equity. However, the average duration of an SIP which was 12-15 months has now risen to 36 months,” said Mr Renjith R.G., National Head — Distribution, Geojit BNP Paribas Financial Services. The average SIP ticket size continues to be Rs 1,800-2,000.

The gold exchange traded funds (ETF) corpus was up 3.4 per cent to Rs 9,886 crore. The AUM of ETFs (other than gold) was down by four per cent to Rs 1,607 crore.

sneha.p@thehindu.co.in

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