Debt schemes account for the largest share of AUMs of mutual funds at 50.2%

Published: June 4, 2019 12:39:39 AM

The total number of folios as on April 30, 2019 stood at 8.27 crore, out of which the largest were in equity schemes with 72% share.

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Assets under management (AUMs) of the Indian mutual fund (MF) industry grew to `24.78 lakh crore in April 2019 registering a growth of 4% over the previous month. This translates to an asset base addition of `0.99 lakh crore within the first month of FY20.

However, this growth rate of 4% is just half of the growth registered in corresponding period last year. The total number of folios as on April 30, 2019 stood at 8.27 crore, out of which the largest were in equity schemes with 72% share.

Scheme-wise resource mobilisation
Net assets of debt, equity and hybrid schemes as on April 30, 2019, stood at `12.44 lakh crore, `7.38 lakh crore and `3.36 lakh crore, respectively. While debt schemes accounted for the largest share of AUMs at 50.2%, equity schemes contributed 29.8%, followed by hybrid schemes at 13.6%. The remaining 6.4% was contributed by solution-oriented and other schemes.

Out of the total net assets of debt MFs of `12.44 lakh crore, liquid funds have the largest share of 38%, followed by fixed term plans of 11% and low duration funds of 7%. Within equity schemes, the largest proportion of net assets is of multi cap fund (21%), large-cap (17%) and ELSS (13%).

Deployment of funds by MFs
Debt MF: The largest share of funds deployed by debt MFs are in short-term duration instruments of less than 90 days, followed by long duration instruments of 33.3%, 12.9% funds are parked in instruments with maturity from 182 days to one year. The remaining 5.1% is parked in instruments with maturity from 90 days to 182 days.

Some other key observations are:
Corporate debt papers have the highest fund exposure of `4.2 lakh crore, with a share of 30% in debt MFs in April 19. The exposure has reduced by `0.14 lakh crore over the previous month. This segment includes floating rate bonds, non- convertible debentures, etc.

Commercial papers have the second highest exposure of `4.09 lakh crore, with a share of 29%, a growth from 27% in previous month.

Funds deployed in bank certificate of deposit and GSecs are stable with shares of 15% and 4%, respectively in April 2019.

Investment in other asset types is increased to 10% in April 2019. This category includes treasury bills, other money market investments, equity linked debentures/notes, asset backed securities, bank FD, etc.

Exposure of MFs to NBFCs
Overall exposure of MFs to NBFCs stood at `2.06 lakh crore in Apr-19, a drop of `0.58 lakh crore since July 2018, when the liquidity crisis began. While the amount has reduced, the percentage share also dropped from 19.04% in July 2018 to 14.81% in April 2019. After the liquidity crisis, MFs withdrew almost 36% of their investments from CPs of NBFCs.

The percentage share of funds deployed by MFs in CPs of NBFCs in April 2019 is at 7.26% and amount held is `1.01 lakh crore. Deployment of funds in corporate debt paper of NBFCs show a different trend wherein October 2018 onwards the exposure to NBFCs rose, but February 2019 onwards is on a downtrend. In April ’19, funds held in this segment were `1.05 lakh crore.

Equity MF: Banks, finance, software, consumer non-durables and petroleum products were top five sectors where equity MFs deployed their funds in April 2019 and they cumulatively accounted for 55% share.

Edited excerpts from CARE Ratings report

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