The mutual fund (MF) industry’s asset base declined marginally by 1.15 per cent to Rs 19.03 lakh crore at the end of May, mainly due to outflow from money market segments. In comparison, the assets under management (AUM) of the MF industry, comprising 42 players, were at an all-time high of Rs 19.26 lakh crore at the end of April, as per the data of Association of Mutual Funds in India (Amfi).
The industry’s AUM had crossed Rs 10 lakh crore in May 2014, and it is expected to reach Rs 20 lakh crore this year. Industry experts attributed the monthly drop in asset base to inflows in liquid or money market segments.
“There is a drop in overall asset base of the industry due to net outflows from the liquid funds, which are susceptible to sharp inflows and outflows as corporate parks short term money in these funds. “Flows in equity, balanced and debt funds still remain strong,” said Kaustubh Belapurkar, Director of Fund Research at Morningstar Investment Adviser.
Overall, outflow in MF schemes stood at Rs 40,711 crore last month as compared to a staggering inflow of Rs 1.51 lakh crore in the preceding month. Of this, liquid funds or money market category —- with investments in cash assets such as Treasury Bills, certificates of deposit and commercial paper for shorter horizon -— witnessed an outflow of Rs 64,692 crore.
However, equity and equity-linked saving scheme (ELSS) saw an infusion of Rs 10,790 crore. Besides, balanced and income funds witnessed an inflow of Rs 7,663 crore and Rs 5,124 crore respectively.
Mutual funds are investment vehicles made up of a pool of funds collected from a large number of investors. The funds are invested in stocks, bonds and money market instruments, among others.