The sharp fall in Indian equity markets in January following the crash in Chinese markets and softening in crude oil prices had a major impact on investor sentiment as the net inflow into equity mutual funds for the month declined to a 21-month low of Rs 2,128 crore.
The fall in equity markets also resulted into a decline in the assets under management for the month of January as it fell marginally for the third straight month to Rs 12,73,714 crore.
- Fiscal deficit woes: Rising domestic participation cushions market fall
- Foreign Investment rise in 2017: Liquidity surge in markets invites cautious trading in new year
- Investors rush to mutual funds; asset base grows over Rs 6 lakh crore
- Investment in mutual funds in November hits Rs 19,508 crore
- Fund surge: Physical assets’ loss is equity market’s gain
- Maharashtra leads the way in average assets managed by mutual fund industry
Ever since the BJP-led government came to power in May 2014, the net inflow into equity schemes of mutual funds have been on a rise. In calendar 2015 the net inflow into equity funds aggregated to Rs 85,154 crore clocking a monthly average of Rs 7,096 crore.
While the highest net inflow of Rs 11,999 crore was witnessed in June 2015, it slowed down in December 2015 and inflows stood at Rs 3,108 crore as markets started to correct following concerns over the US Federal Reserve raising interest rates.
In January 2016, the pace of inflows further slowed and stood at a 21-month low of Rs 2,128 crore.
The decline in the benchmark indices by around 5 per cent in January also had an impact on the overall equity AUM of mutual funds. While the equity AUM stood at Rs 3.64 lakh crore in December 2015, the equity AUM slipped to Rs 3.45 lakh crore.
As per the data released by the Association of Mutual Funds in India, the overall AUM of mutual funds as on January 31, declined to Rs 12,73,714 crore as against Rs 12,74,835 crore in the preceding month. The industry AUM stood at Rs 13.24 lakh crore in October 2015.