Stocks

AUM of MF industry down 18% in March on Covid-19 crisis

Suresh P Iyengar Mumbai | Updated on April 09, 2020

Equity investors pump in record ₹11,700 cr as market tanked last month

The assets under management (AUM) of the mutual fund industry dipped 18 per cent in March to ₹22.26-lakh crore against ₹27.22-lakh crore logged in February due to the huge outflow of ₹1.94-lakh crore from debt-oriented schemes.

Despite the turbulence caused by the pandemic, the equity schemes of mutual funds registered the highest-ever monthly inflow of ₹11,723 crore in March, with investors taking advantage of the sharp fall in the market. In fact, equity schemes saw a net inflow of ₹30,396 crore in the March quarter.

Last month, multi- and large-cap funds recorded the highest inflows of ₹2,268 crore and ₹2,060 crore, while focussed and equity-linked saving schemes logged inflows of ₹1,994 crore and ₹1,551 crore.

However, the equity AUM was down 24 per cent at ₹5.78-lakh crore against ₹7.57-lakh crore logged in February due to mark-to-market losses, in line with the Sensex which fell 23 per cent month-on-month in March. Interestingly, among hybrid schemes, arbitrage funds saw record outflow of ₹33,767 crore as the derivative futures went into discount over the spot cash market, thus shattering the fundamentals of the scheme to make money. Balanced and aggressive hybrid funds witnessed an outflow of ₹1,516 crore. Investment through systematic investment plans (SIPs) hit a new high at ₹8,641 crore against ₹8,512 crore in February. The number of SIP folios increased by two lakh to 3.11 crore against 3.09 crore registered in February.

Among the debt schemes, liquid funds logged an outflow of ₹1.10-lakh crore as corporates pooled money to meet advance tax payment obligations, while ultra short duration and money market funds saw outflows of ₹29,053 crore and ₹27,402 crore, respectively. Low and short duration funds, which attract excess corporate liquidity, also recorded outflows of ₹19,921 crore and ₹11,038 crore.

In the financial year ended March, the AUM of the MF industry was down 12 per cent. The industry AUM was ₹25.28-lakh crore in April 2019.

NS Venkatesh, CEO, Association of Mutual Funds in India, said instead of exiting their equity investments during the unprecedented situation, retail investors have added more folios to record a high annual SIP mobilisation of ₹1-lakh crore last fiscal.

Himanshu Srivastava, Senior Analyst Manager Research, Morningstar India, said at a time when foreign institutional investors (FIIs) were on a selling spree in equity, domestic investors have displayed greater maturity as most of them not only held on to their investments, but also built on their equity portfolios.

Published on April 09, 2020

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