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MF assets marginally slip to Rs 23.16 tln

Monday, March 11, 2019

The assets under management (AUMs) of the mutual fund industry has declined by a marginal 0.89% to Rs 23.16 lakh crore in February due to outflows from income and liquid funds.

Waning interest in equity funds can be seen in the other equity-oriented category in the industry-balanced funds.

The category witnessed outflows for the second straight month, to the tune of Rs 1,077 crore in February against an outflow of Rs 952 crore in January, according to the data collated by Crisil.

Net outflows and MTM (mark-to-market) losses led to the erosion in asset base worth Rs 2,825 crore, or 1.61% to Rs 1.73 lakh crore.

In the reporting month, equity funds witnessed inflows of Rs 4,640 crore.

The inflows in equity funds have been sporadic in recent months due to volatility in the underlying market.

In the previous two months, inflows into equity funds stood at Rs 5,082 crore and Rs 4,442 crore, respectively, much lower than Rs 10,000 crore average monthly inflows in the previous 32 months.

Investors in debt funds seem to be unnerved by the debt downgrade and credit liquidity crisis that ailed the mutual fund industry in the latter half of 2018, as seen by outflows in February, the agency said.

Debt funds (excluding liquid and gilt funds) witnessed outflows worth Rs 4,214 crore, the sharpest monthly outflows seen since November 2018 which had recorded outflows amounting to Rs 6,518 crore.

Despite the heavy outflows, debt funds saw marginal AUM decline to the tune of Rs 1,714 crore, or 0.25%, to Rs 6.96 lakh crore, helped by mark-to-market gains, it said.

Gilt funds witnessed outflows of Rs 149 crore in February, higher than Rs 89 crore in January, marking the sharpest outflows recorded since October 2018 when it was Rs 291 crore.

Net inflows into equity MFs dive 68% to Rs 5,122 cr in Feb
Net inflows into equity mutual funds slumped 68% to Rs 5,122 crore in February this year as against Rs 16,268 crore in the same month a year ago amid market volatility. This also marked the fourth consecutive month of decline in net investment into equity mutual funds, according to data by Association of Mutual Funds in India (Amfi).

Net inflows have been declining since October 2018, when investment stood at Rs 12,622 crore.  November saw Rs 8,414 crore net investment, December Rs 6,606 crore and January Rs 6,158 crore. With this, asset base of equity mutual funds (MFs) came down to Rs 7.73 lakh crore at the end of February this year, as against Rs 7.76 lakh crore in the same month a year earlier.

Analysts attributed the tepid trend in equity mutual fund inflows to market volatility. They said SIPs (systematic investment plans) continue to be strong but lump sum flows have been tepid.

Amfi CEO N S Venkatesh said, "Once political uncertainty and liquidity tightness recedes over the next few months, we expect the inflows in both equity and liquid funds to strengthen further."

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