The latest plunge in equities, which began as the world ushered in 2016 and China tripped the global markets, shaved assets under management (AUMs) of mutual funds by Rs 11.21 billion to Rs 12.74 trillion in January, according to data from the Association of Mutual Funds in India.
A press release by Crisil says, “Not surprisingly, equity funds were battered, and their AUMs fell 5.25% to Rs 3.84 trillion, marking the biggest percentage decline in the last 35 months. In absolute terms, AUMs shrank Rs 213.12 billion, or the most in seven years, as mark-to-market losses surged. The Nifty 50, the market bellwether, declined nearly 5% in January.”
AUMs of balanced funds fell 2.5%, or R10.72 billion, to R411.21 billion, primarily led by losses in equity assets.
However, investors didn’t seem perturbed as the category still managed to attract R8.80 billion, marking the
20th consecutive month of net inflows.
Represented by the Crisil Balanced Fund Index, the category lost nearly 3% in value in January.
Officials in the mutual fund industry say there is nervousness among investors, but at the same time, they are waiting for right time to enter the markets.
“Despite fall in markets, equity still remains attractive compared to gold or real estate, we are hopeful that fund flows will continue to remain positive even if there is volatility in the markets,” CEO of a leading fund house said.
Crisil said for income funds, AUMs climbed 3%, or Rs 166 billion, to Rs 5.72 trillion, driven by inflows and mark-to-market gains. January saw an inflow of R150 billion, which is a rebound considering that in December 2015, there was an outflow of Rs 258.75 billion.
AUMs of liquid funds edged up 1.6%, or Rs 37.32 billion, to Rs 2.37 trillion, aided by net inflows of Rs 24.55 billion.