The recently-ended financial year 2018-19 saw mutual fund assets growing at the slowest pace in seven years as debt funds, which constitute a major portion of the overall assets under management (AUM) of the industry, saw huge outflows.
According to a latest analysis by Crisil, the total AUM rose 6% to touch ₹24.51 lakh crore in the fiscal, even as debt funds saw total outflows of ₹1.38 lakh crore between April 2018 and February 2019.
Debt funds, which account for nearly 45% of the total assets, managed to recoup some of the losses of the previous quarter, and were up 2.3% or ₹24,500 crore, to ₹11.08 lakh crore in the March quarter.
“Recovery can be attributed to mark-to-market (MTM) gains amid a pull back in yields and as sentiments soothed after the recent credit and liquidity crisis in the debt market,” the Crisil report said. In percentage terms, assets of money market, banking and PSU, and ultra-short duration funds, grew in double digits — around 20%, 19% and 15%, respectively. In absolute terms, liquid funds topped the chart with a gain of ₹14,500 crore in the AUM.
Assets of low duration, medium duration, credit risk, short duration and floater funds fell the most in absolute terms among the debt categories. Meanwhile, the average AUM of the mutual fund industry rose 3.6% in the fourth quarter of the fiscal to ₹24.51 lakh crore as against a fall of 2.8% in the preceding quarter.
Supported by investor interest in equity mutual funds in the form of lump sum and systematic investment plans (SIP), the category’s average assets rose nearly 6%, or by ₹36,000 crore to ₹6.58 lakh crore in the latest quarter.
As per data available with the Association of Mutual Funds in India (AMFI), the category saw net inflows of ₹9,700 crore between January 2019 and February 2019.
Within the category, average AUM of multi-cap, large cap, equity-linked savings scheme (ELSS) and mid-cap funds witnessed the biggest rise in absolute terms. On a consolidated basis, their AUM — 63% of the total equity average AUM — rose by ₹23,400 crore during the quarter.
In terms of assets, most of the fund houses registered a rise in their AUM, though the industry assets continued to be highly concentrated among the top mutual funds.
“Of the 42 fund houses [including infrastructure debt funds] that declared average AUM, 30 gained in the quarter. The industry continued to be highly concentrated, with the share of the top five and top 10 fund houses being 58% and 83%, respectively, as of March 2019 — almost the same as in the previous quarter,” said the report.
While HDFC Mutual Fund maintained its top position in terms of average AUM in the quarter, it was followed by ICICI Prudential Mutual Fund, and SBI Mutual Fund.
