Equity-oriented schemes accounted for 42.3% of the total MF industry AUM in June. This is largely unchanged as compared to 42.5% share in March, shows recent AMFI data.
Equity funds include equity funds, ELSS and balance funds.
Experts pointed out that the share of equity-oriented schemes remained flat as the industry AUM and assets in equity funds grew at the same pace.
Vishal Kapoor, CEO, IDFC AMC said, “The non-equity portion has grown largely at the same pace as the equity. In other words, the industry growth is largely similar to that of growth in equity funds.”
At the end of June, the Indian MF industry managed average AUM of Rs.25.8 lakh crore, up 8% from Rs.23.8 lakh crore a quarter ago. Meanwhile, average AUM of equity-oriented schemes rose to Rs.10.9 lakh crore in June, up 8% compared to 10.1 lakh crore a quarter ago.
Among other notable trends was the movement in liquid and debt funds. While appetite for debt funds took a hit amid defaults and downgrades, liquid/money market funds became more attractive.
The share of debt funds declined this quarter. In June, it stood at 28.3%, lower than 29.1% in March. Meanwhile, share of liquid/money market funds in the MF industry rose to 23.6% in June from 23.2% a quarter ago.
At the end of June, average AUM of liquid funds stood at Rs. 6.1 lakh crore, up 10% against Rs. 5.5 lakh crore in March. In case of debt funds, the average AUM stood at Rs. 7.3 lakh crore, up only 5% against Rs. 6.9 lakh crore.
Arvind Chari, Head – Fixed Income & Alternatives, Quantum Mutual Fund, said that following the recent credit events, investors have started to rethink if the extra risk in debt funds is worth taking. Unlike equities, the extra risk cannot yield sharply higher returns.
Chari said, “Investors have also realised that it is easy to churn the liquid funds and they are safer than other debt-oriented schemes such as credit risk funds or duration funds. Further, fund houses have also reduced their credit risk in liquid funds to make it safer,” he added.
Kapoor said that among other trends in the industry, liquid or short-end funds have grown, while longer end funds and credit funds have shrunk.
