The domestic mutual fund industry registered a moderate growth of 5 per cent in its assets under management (AUM) in August at Rs 7,57,000, thanks to the good showing by debt funds.
Except for the debt funds, all other categories of funds witnessed net outflows during the month primarily because of the ban on entry load imposed by the Securities and Exchange Board of India (Sebi) from August 1. But the debt category, driven by the ultra short-term segment, registered net inflows during the month under review.
On the returns front, according to a report by Crisil FundServices, equity funds outperformed on the back of a strong performance from mid-cap and small-cap funds, while long-term debt funds suffered losses due to rising yields. “Ultra short-term debt funds saw strong inflows in August with banks parking their surplus funds in these schemes,” said Krishnan Sitaraman, director, Crisil FundServices.
| DEBT AS DRIVER |
| * MF industry grows 5% in August |
| * All funds, except debt schemes, see net outflows |
| * The industry sees net inflows of Rs 32,700 crore |
| *Net inflows in debt funds at Rs 38,300 crore |
| *Highest net outflows in liquid funds at Rs 5,200 crore |
| * Gilt funds see net outflows of Rs 450 crore |
| * Net outflows in equity funds at Rs 250 crore |
He further added that the ban on entry loads seemed to have initially dulled the inflows into equity funds even though fund performances were good for the month.
In its analysis, Crisil covered over 300 equity-oriented schemes, which revealed that more than 250 of them gave better one-month returns than that of the S&P CNX Nifty in August. “Mid-cap and small-cap funds posted better returns than large-cap funds,” said the report.
The month under review saw a net inflow of Rs 32,700 crore across all categories, though debt funds alone witnessed Rs 38,300 crore of net inflows. The overall net inflow was lower than that of the debt funds because of massive outflows in equity funds.
Liquid funds saw the highest net outflows of Rs 5,200 crore among mutual fund categories.
“This was driven by lower returns, which led investors to shift to ultra short-term debt funds,” said the report.
Gilt funds and equity-oriented funds too witnessed net outflows of Rs 450 crore and Rs 250 crore, respectively.
