Markets

MF assets rise to record highs in January

Jump in flows into debt funds; mid-cap and small-cap funds see revival in investor interest

The average assets under management of mutual funds hit an all-time high of ₹28.18 lakh crore in January, as flows into debt funds increased significantly, while mid-cap and small-cap funds saw a revival in investor interest.

According to the Association of Mutual Funds in India (AMFI), net inflows in the month of January was pegged at ₹1.20 lakh crore, as against outflows of nearly ₹61,810 crore in December 2019.

Further, the total assets under management (AUM) touched ₹27.86 lakh crore in January.

Further, flows into income and debt category turned positive in January with net inflows of ₹1.09 lakh crore, as against the previous month’s outflows of nearly ₹78,427 crore. Such categories of funds typically see a spurt in outflows at the end of every quarter.

Within the equity segment, both mid-cap and small-cap categories of funds saw net inflows of over ₹1,000 crore each, with the mid-cap category registering flows of nearly ₹1,800 crore in January.

Incidentally, the BSE Midcap index gained a little over 3% in January after losing ground in December. Further, the gains in the broader index came even as the benchmark Sensex lost nearly 1.30% in January.

“While the small-cap funds have not been in favour during the last few months, the recent market rally seems to have driven the inflows into small and midcap fund inflows. As a result, the small cap AUM has also seen the biggest jump in the last nine months,” said Sundeep Sikka, ED and CEO, Nippon Life India Asset Management.

“With the Union Budget 2020 and subsequent RBI policy leading to several structural changes, we will continue to stay optimistic on the market outlook. The retail investors may continue investing in the markets through SIPs [systematic investment plans], while staying balanced in their investing approach between different asset classes,” added Mr. Sikka.

Meanwhile, the number of SIP folios crossed the three-crore mark, with the number of such folios pegged at 3.04 crore in January – the month saw addition of 12.07 lakh folios.

Further, the flows through SIPs was ₹8,531.90 crore in January with the AUM pegged at ₹3.25 lakh crore.

According to N.S. Venkatesh, chief executive, AMFI, the SIP contribution and the AUM is a proof that retail investors have accepted mutual funds as a long term wealth creation avenue.

“We expect this positive growth momentum in mutual fund AUMs to continue, driven by growth-oriented Budget and RBI stance on continuing benign interest rate cycle, resulting in 15- 20% growth for the mutual fund industry this fiscal,” said Mr. Venkatesh.

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Printable version | Apr 3, 2020 7:58:14 AM | https://www.thehindu.com/business/markets/mf-assets-rise-to-record-highs-in-jan/article30785610.ece

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