MF assets rise 22% to Rs.21.36 lakh crore in FY 2017-18

The assets under management of the mutual industry rose 22% in FY 2017-18, from Rs.17.55 lakh crore to Rs.21.36 lakh crore, shows the latest AMFI data.

Thanks to investor appetite for equity funds, the AUM of equity funds rose 39% in FY 2017-18.  If we include ELSS, balanced funds and ETFs that track indices, the overall growth in the equity category went up to 48% in FY 2017-18 i.e. to Rs.9.95 lakh crore in FY 2017-18 from Rs.6.73 lakh crore in the preceding fiscal.

However, the industry saw a decline in net inflows in equity funds compared to the preceding months. The total net inflows in equity category was Rs.18,493 crore in March as against Rs.22,240 crore in February and Rs.20,821 crore in January.

Vidya Bala, Head of Mutual Fund Research, FundsIndia attributes this to market correction and re-introduction of LTCG tax on equity funds. “Last month, we have seen volatility in the markets. This resulted in large-scale redemption from the equity funds from both HNIs and retail investors. Moreover, some investors have redeemed their investments to avoid paying tax on their capital gains from equities,” said Bala.   

In March, BSE Sensex had corrected by 3.55% to end at 32,969. 

Last month, inflows in balanced funds were highest at Rs.6,754 crore compared to other categories. Pure equity funds and ETFs followed balanced funds with inflows of Rs.2,954 crore and Rs.5,082 crore, respectively.

In percentage terms, ETFs witnessed 41% rise in assets in FY 2017-18 on the back of investor demand for Bharat 22 ETF and the increase in incremental equity investment by EPFO to 15%.

Overall, the MF assets fell 3.79% in March to Rs.21.36 lakh crore due to redemption from debt funds as corporates redeem their MF investments to meet advance tax liability and mark to market losses.

Net inflow/(outflow) and AUM as on March 31, 2018

Source: AMFI