Mutual fund assets up 3% even as equity inflows decline by 15%

Suresh P Iyengar Mumbai | Updated on June 09, 2020

Debt-oriented funds see ₹63,600-crore inflows against the overall ₹70,813-crore

Inflows into equity schemes of mutual funds plunged for the second consecutive month. For the month of May, inflows fell 15 per cent at ₹5,257 crore against ₹6,213 crore logged in April. Huge volatility in the stock market and lacklustre returns had forced many investors to discontinue equity systematic investment plans (SIPs).

Multi-cap funds registered the sharpest fall of ₹759 crore (₹1,240 crore), while that of sectoral and thematic funds plunged to ₹197 crore (₹422 crore). Large-cap funds dipped to ₹1,556 crore (₹1,691 crore). Overall equity assets under management was down at ₹6.5-lakh crore (₹6.6-lakh crore).

Inflow into hybrid schemes increased to ₹8,652 crore (₹4,204 crore) on the back of ₹10,806 crore (₹6,587 crore) inflow into arbitrage schemes.

Overall, the assets under management (AUM) of the mutual fund industry climbed 3 per cent in May at ₹24.54-lakh crore, from ₹23.93-lakh crore logged in April, largely due to higher flow into debt-oriented funds.

In fact, inflow of ₹63,600 crore into debt-oriented funds made up for the bulk of fresh investment of ₹70,813 crore witnessed in May.

Assets in debt schemes increased to ₹11.5-lakh crore against ₹10.74-lakh crore in April due to inflow of ₹61,870 crore in liquid funds, ₹8,873 crore in banking and PSU funds and ₹5,010 crore in money market funds.

Overnight funds

However, overnight funds witnessed outflow of ₹15,880 crore while credit risk and medium duration funds saw outflows of ₹5,173 crore and ₹1,519 crore.

Investments through SIPs dipped for the second month in a row, by 3 per cent in May to ₹8,123 crore (₹8,376 core). The SIP assets increased marginally to ₹2.76-lakh crore (₹2.75-lakh crore).

NS Venkatesh, CEO, Association of Mutual Funds in India, said despite fall in investment through SIPs, the number of new accounts opened is higher and overall inflows is still above the ₹8,000-crore-mark.

Kaustubh Belapurkar, Director, Morningstar India, said inflows into equity funds, while lower than in previous months, continue to remain positive, largely driven by SIP inflows. Investors continue to prefer large- and multi-cap funds given the market volatility and uncertain economic environment due to the Covid-19 pandemic.

Published on June 08, 2020

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