Mutual funds asset dips by 10 percent in March

Mutual fund industry witnessed net outflow of Rs. 1.09 lakh crore, the highest in three years.

After touching an all-time high asset under management of Rs. 9.16 lakh crore in February, the AUM of mutual fund industry went down sharply to Rs. 8.25 lakh crore, a fall of 10% or 91,152 crore in March. The AMFI data shows that the industry has witnessed net outflow of Rs. 1.09 lakh crore, highest monthly outflow since March 2011, due to huge redemption from equity and liquid funds.

Equity Funds

After four consecutive months of inflows, equity mutual funds finally ended up last fiscal in red. Equity funds saw net outflow of Rs. 2122 crore on account of profit booking. The S&P BSE Sensex gained 6% or 1278 points - from 21,120 to 22,386 points in March. Investors are increasingly tending to cash out whenever there is an upside.

In March, the gross redemption from equity funds stood at Rs. 7,627 crore. However, five equity funds equity funds mopped up Rs 382 crore. IDBI Diversified Equity Fund collected Rs. 25 crore while close end equity funds - BSL Focused Equity Fund - Series 2, HDFC Rajiv Gandhi Equity Savings Scheme - Series 2, ICICI Prudential Value Fund - Series 3 and Sundaram Select Micro Cap Series IV mopped up Rs. 357 crore.

Meanwhile, the AUM of equity funds went up from 1.57 lakh crore to Rs. 1.66 lakh crore due to mark to market gains.

Debt Funds

Liquid fund is the biggest loser in debt funds category. The industry saw a whopping net outflow of Rs. 1.2 lakh crore from liquid funds in March. Corporates and banks generally pull out money during quarter end in order to meet their liquidity requirements. In February, the industry received Rs. 2.5 lakh crore inflows in liquid funds.

Income funds or fixed maturity plans received net inflows of Rs. 7,838 crore. The industry launched 200 FMPs last month which mopped up Rs. 32,723 crore. Fund houses typically launch long tenure FMPs during February and March, which if held of more than one year by investors, offer double indexation benefits. Income funds constitute Rs. 4.61 lakh crore or 56% of industry’s total Rs. 8.25 lakh crore assets under management.

ETFs

Gold ETFs continued to see redemptions in March. The category saw net outflows of Rs. 149 crore. There are 14 Gold ETFs in the industry with assets under management of Rs. 8,676 crore. However, ETFs linked to other indices saw net inflows of Rs. 3,087 crore as many of these funds comply with RGESS to avail tax benefit to investors.

Source: AMFI