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The assets under management (AUM) of the mutual fund industry inched closer to the ₹26-lakh crore mark by registering a 5 per cent growth in May to ₹25.93-lakh crore, up from ₹24.78-lakh crore logged in April, on the back of ₹70,000-crore net inflow into liquid funds. The credit risk and medium duration funds witnessed outflow of ₹6,000 crore due to a series of defaults on interest payments by large corporates.
Inflow into equity schemes registered an increase of 17 per cent to ₹5,408 crore against ₹4,609 crore recorded in April as investors pumped in ₹1,415 crore and ₹1,273 crore in small- and mid-cap funds, respectively. The AUM of equity-oriented schemes increased to ₹7.24-lakh crore (₹7.03-lakh crore), while that of debt schemes was up at ₹11.70-lakh crore (₹10.88-lakh crore).
NS Venkatesh, CEO, the Association of Mutual Funds in India, said the outflow from credit risk funds may be re-invested in gilts and high-quality income funds, as interest rates are expected to come down with the RBI changing its credit policy stance to accommodative.
The retail fund flow would strengthen on the back of political stability, promise of further economic reforms and improving macro-economic environment coupled with healthy corporate earnings growth, he added.
SIP inflow dips
Inflow through systematic investment plans (SIPs) was down marginally last month at ₹8,183 crore against ₹8,236 crore, even as the mutual fund industry opened four lakh new SIP accounts in May, an indication that some of the existing investors are discontinuing their monthly remittances and new SIP accounts are being added.
The AUM of SIP accounts was up by about ₹10,000 crore at ₹2.79-lakh crore (₹2.69-lakh crore). Retail investors’ AUM climbed 2 per cent at ₹11.18-lakh crore in May against ₹10.91-lakh crore.
The mutual fund industry opened 5.54 lakh new folios last month taking the overall folio count to 8.32-lakh crore in May despite the number of defaults in the debt market shaking investor confidence.
Gautam Kalia, Head (Investment Solutions), Sharekhan by BNP Paribas, said the general election results have given a significant boost to the markets and it is reflected in the significant positive flows in equities, especially the small- and mid-cap funds that have attracted half of the total net flows into equities in May.
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