Equity MFs’ assets swell in May

Equity mutual funds continue to see rise in assets under management (AUM), even as the overall asset base shrunk in May.

According to a Crisil study based on Association of Mutual Funds in India data, investors continued to favour equity funds, pumping in ₹4,721 crore in May compared with ₹4,438 crore in April. The category’s asset base rose 3.8 per cent or ₹15,312 crore, to ₹4.15 lakh crore, riding on inflows and mark-to-market (MTM) gains, finds the Crisil study.

Benchmarks BSE S&P Sensex and NSE’s Nifty 50 indices rose nearly 4 per cent in May, as sentiment improved on hopes of a good monsoon and relatively better-than-expected performance by India Inc in the fourth quarter ending March 2016.

“This is further confirmation that the outflow of ₹1,370 crore seen in March was but a blip for a category that has posted monthly inflows since May 2014,” said Crisil.

However, the industry’s asset base retreated to 13.82 lakh crore in May from a record high of ₹14.22 lakh crore in April, a decline of 2.8 per cent. The fall was primarily due to outflows in liquid and gilt funds.

Liquid fund assets fell 20 per cent to ₹2.70 lakh crore, following the largest outflow in nine months. The category saw a trend reversal, with an outflow of ₹69,399 crore versus an inflow of ₹1.34 lakh crore in April, said Crisil.

For the fourth straight month, gilt funds witnessed outflows, indicating fading investor interest. Assets of gilt funds fell 4.8 per cent to ₹15,352 crore.

Balanced funds, which have exposure both in equities and debt, maintained the positive trend seen over the past two years. The funds witnessed record high AUM of ₹42,695 crore, up 4.7 per cent. The underlying of Crisil Balanced Fund — Aggressive Index rose 2.8 per cent in May.

While debt funds’ assets peaked to a new high of ₹6.11 lakh crore, gold ETFs continue to lose sheen. Gold ETFs, which have seen persistent outflows over the past three years, saw a further ₹79 crore exit in May. The category’s AUM fell 5 per cent to ₹6,159 crore.

The underlying asset class, represented by the Crisil Gold Index, fell 3.3 per cent in May.