The mutual fund industry witnessed a sharp surge of 16 per cent, or Rs 87, 875 crore, in their average assets under management (AAUM) in May. As a result, the asset base crossed Rs 6.3 lakh crore for the first time.
According to data from the Association of Mutual Funds in India (Amfi), net inflows were to the tune of Rs 30,148 crore, largely led by income, equity and gold exchange traded funds (ETFs).
Income funds saw net inflows of Rs 28,114 crore. This was much less when compared with April’s inflows, which were a whopping of Rs 103,055 crore. Liquid funds collected Rs 856 crore.
Equity funds saw net inflows of Rs 1,903 crore. The surge in stock markets led to a change in asset allocations in terms of more investors going for equities compared with debt.
The sharp rise in the stock market was also a reason for such high inflows. Even new fund offers that came recently received good response from investors. For instance, ICICI Prudential Target fund collected around Rs 800 crore.
Equity-linked saving schemes (ELSS) also found favour with investors and saw net inflows of Rs 27 crore.
Gold ETFs witnessed a net inflow of Rs 113 crore in May. In comparison, there were net outflows of Rs 4 crore in April. Industry experts said due to a slight fall in prices, investors were flocking back to gold.
Among the categories that saw outflows were balanced funds and fund of funds (FoF). Balanced funds saw a net outflow of Rs 43 crore and FoFs, which include schemes that invest in the overseas market, saw net outflow of Rs 127 crore. Gilt funds saw an outflow of Rs 792.
Mahendra Jajoo, head, fixed income and structured products, Tata Asset Management Company, said, “This low inflow is mainly because of the fact that interest rates were going up, which has impacted returns from these funds. Therefore, investors are showing less interest in them.”
