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Trends MF AUM reaches close to Rs.18 lakh crore in February

MF AUM reaches close to Rs.18 lakh crore in February

Thanks to sustained inflows through SIPs, MF AUM reaches Rs.17.89 lakh crore in February.
Nishant Patnaik Mar 7, 2017

AMFI’s latest data shows that the AUM of the Indian mutual fund industry has reached all-time high at 17.89 lakh crore in February.

The AUM of the Indian MF Industry has grown from Rs. 3.26 lakh crore as on March 31, 2007 to Rs. 17.89 lakh crore as on February, a five-fold increase in a span of less than 10 years, shows AMFI’s data.

The industry’s AUM had crossed the milestone of Rs.10 lakh crore for the first time in May 2014 and in a span of less than three years, the AUM size has reached close to Rs.18 lakh crore.

The growth has come largely on account of SIPs and mark to market gain.

Growing appetite for equity funds

The rising market is helping the industry attract investors. From 27,700 levels at the start of February, the Sensex grew 4% to 28,750 on February 28.

The latest AMFI data testifies to this trend. In February, equity funds received net inflow of Rs. 5465 crore.

Encouragingly, a predominant share of the flow has come in pure equity funds (not arbitrage), say fund officials. “Arbitrage funds have not received inflows in February due to unattractive spreads. In fact, there has been an outflow from arbitrage funds this month,” says DP Singh, ED & CMO (Domestic Markets), SBI MF.

He further said that the growth in equity assets is largely due to SIPs. “Industry has received Rs.4300 crore through SIPs in February. Nearly 99% of this SIP inflows is in equity category. Many investors are looking at equity funds as a long term asset class which can help them fetch better returns.”

On an average, about Rs. 4000 crore comes from SIPs every month. Sustained inflow helped equity funds receive Rs. 55,000 crore net inflow year to date (YTD), shows AMFI data.

AMFI data shows the mutual fund SIPs accounts stood at 1.28 crore in January 2017. In fact, the MF industry has been adding about 6.86 lacs SIP accounts each month on an average during the current financial year.

If we take into account inflow in balanced funds (Rs. 4562 crore), ELSS (Rs. 997 crore) and equity ETFs (Rs. 930 Rs. crore), the combined inflow in equity category is close to Rs. 12,000 crore in February. In fact, the equity AUM of the industry has now reached Rs.6.37 lakh crore (including balanced, ELSS and equity ETFs).

Balanced funds continue to appeal to investors. AMFI data shows that net inflows in balanced funds stood at Rs.4562 crore in February. One of the main reasons behind this trend could be the change in tax structure of debt funds.

Another healthy trend was observed in ETFs that track the equity indices. The category received inflows of Rs.930 crore in February. Experts say that the participation of EPFO in equities through the ETF route has helped this category grow. “Long term institutional investors like EPFO and NPS managers have started investing in ETFs for better risk adjusted returns,” Singh added.

Barring gilt, gold ETFs and FOFs investing overseas, all other categories have witnessed positive net inflows in February.

Monthly inflows/outflows in February 2017

Category

Net inflow/outflow

AUM

Equity

5465

463296

Balanced

4562

77126

ELSS

997

56724

Other ETFs

930

40147

Income

10864

794679

Liquid

8227

331777

Gilt

-722

15799

Gold ETFs

-46

5766

FOF overseas

-4

1842

Total

30273

1789047

Source: AMFI

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