Domestic funds witnessed a net outflow for a successive month, in June, thanks to sucking out of money by banks and companies. Barring gold exchange traded funds, and liquid and money market funds, all other categories saw money flowing out of the fund houses' corpus.
According to the Association of Mutual Funds in India (Amfi), redemptions in June were Rs 1,19,449 crore. Income funds contributed the largest, with a net outflow of Rs 1,34,354 crore, followed by equity schemes at Rs 1,446 crore.
Liquid and money market funds had Rs 17,029 crore and Rs 59 crore as net inflows in June, respectively.
"The banks and corporates took out the funds in the later part of the month because of the quarter-end. Advance tax, 3G and BWA auctions were the major two factors responsible for money outflow," said Jaideep Bhattacharya, chief marketing officer at UTI Mutual Fund.
During the month, new schemes managed to mop Rs 7,977 crore. Most of the money flowed into debt schemes, amounting to Rs 6,849 crore, whereas new equity schemes garnered Rs 1,068 crore during the month.
Noticeably, in June, the industry saw the steepest dip in the assets under management (AUM), of close to 16 per cent. The average AUM for June was squeezed to Rs 6,75,864 crore, against Rs 8,03,559 crore in May.
On the positive side, however, the fund market could see a net inflow of Rs 3,547 crore so far (April-June) in the current financial year. Though, compared to the Rs 1,00,403 crore in the same period last year, the current year's net inflow is minimal.