Mutual Funds’ asset base slips 2% in Dec.

Fund managers attributed the drop in the asset base to outflow of ₹78,940 crore from debt-oriented schemes.

Fund managers attributed the drop in the asset base to outflow of ₹78,940 crore from debt-oriented schemes.   | Photo Credit: Getty Images/iStockphoto


Liquid funds witness pull out of over ₹71,000 crore; equity funds see net infusion of ₹4,432 crore

The mutual fund industry saw its asset base slip by 2% to ₹26.54 lakh crore at December-end, primarily on account of outflow from debt-oriented schemes, including liquid funds.

The 44-player industry logged an all-time high assets under management (AUM) of ₹27.04 lakh crore at November-end, as compared to ₹26.54 lakh crore by the end of last month, representing a decline of 2%, according to data from the Association of Mutual Funds in India (Amfi).

Mutual fund houses witnessed an overall outflow of ₹61,810 crore last month as compared to an inflow of ₹54,419 crore in November.

Fund managers attributed the drop in the asset base to outflow of ₹78,940 crore from debt-oriented schemes.

Among debt-oriented schemes, liquid funds, with investments in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon, witnessed a pull out of over ₹71,000 crore, the highest among the fixed-income segment last month.

Besides, overnight funds, which invest in securities with a maturity of one day, saw outflows of over ₹8,800 crore. However, banking and PSU funds, which have a high allocation to highest rated bonds, received funds to the tune of ₹4,770 crore.

“Fixed income categories, especially those having modified duration or average maturity less than a year, witnessed net outflows during the month. However, this is on expected lines as these categories typically witness net outflows during the quarter end months on account of advance tax payment obligation,” Himanshu Srivastava, senior analyst manager — Research at Morningstar Investment Adviser India, said.

Naveen Kukreja, CEO at, attributed the decline in monthly asset base to sell-off in debt schemes.

Equity-oriented funds continued to attract investments, tracking the surge in domestic markets in December. Such funds saw a net infusion of ₹4,432 crore last month. In comparison, net flow of ₹933 crore was seen in November and ₹6,015 crore in October.

“The small cap and mid cap indices are underperforming currently. The industry has seen inflows in the large cap funds and it will continue to be the biggest attraction among equity funds,” Mr. Kukreja added.

Collection through systematic investment plans (SIP) surged to over ₹8,518 crore in December from ₹8,273 crore in the preceding month. The asset base of SIPs rose to an all-time high of ₹3.17 lakh crore from ₹3.12 lakh crore, reflecting positive sentiment in equities.

Amfi chief executive N.S. Venkatesh said, “Retail investors continue to repose trust in mutual funds as reflected by continued flows through SIPs, despite challenging domestic economic scenario and global trade issues and conflicts.”

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Printable version | Jan 19, 2020 9:14:03 PM |

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