Equity funds accounted for 42.5% of the total mutual fund industry AUM last fiscal.
AMFI’s latest data shows that while the proportionate share of equity and liquid funds grew last fiscal, the share of income funds and gilt funds declined in FY 2018-19.
Equity funds include equity and balance funds.
At the end of FY 2018-19, the Indian MF industry managed average AUM of Rs.24.60 lakh crore, up 8% from Rs.22.70 lakh crore a year ago. The proportionate share of equity funds stood at Rs.10.50 lakh crore or 42.5% of the MF industry’s assets, up from 9.30 lakh crore or 41%, a year ago. Similarly, the proportionate share of liquid funds increased to Rs.5.70 lakh crore or 23.2% as against Rs.4.60 lakh crore or 20.3% a year ago.
However, the proportionate share of debt funds declined to Rs.7.2 lakh crore or 29.1% of the MF industry assets from Rs.8 lakh crore or 35.3% a year ago.
Experts said the decline in the proportionate share of debt funds was due to credit downgrades and series of defaults post IL&FS crisis. As a result, many investors have opted for liquid funds, believe experts.
A. Balasubramanian, CEO of Aditya Birla Sun Life AMC said that last fiscal was not good for debt funds both in terms of interest rate and credit point of view. This led to some outflows from fixed income funds especially from HNIs.
He added that while equity-oriented schemes receive investment from SIPs, inflows to debt-oriented schemes largely come from lumpsum investment. Given the uncertainty in debt market last year, investors were not keen to opt for debt-oriented funds.
Explaining the change in asset allocation in the MF industry, Lakshmi Iyer, Chief Investment Officer (Debt) of Kotak AMC said that uncertainty in interest rate movement has prompted many investors to keep their money in liquid funds.
Source: AMFI
