The mutual fund industry posted outflows of Rs 58,941 crore in the quarter ended March 31,2012,the highest in the last seven quarters,on the back of huge outflows in the debt category.
The industrys average assets under management (AUM),on the other hand,fell to its lowest in the past seven quarters.
In the just concluded March quarter,equity funds,which include balanced,other ETF and fund of funds investing overseas,saw outflows to the tune of R3,470 crore,the most in the last six quarters,data compiled by Crisil Research shows. The July-September quarter of 2010 had seen higher net outflows at R13,975 crore.
Mutual Funds Check for top funds
Indian equities as measured by the Sensex slipped by about 10.5% in the last fiscal.
Outflows in the debt category,which includes income,liquid and gilt funds,stood at R55,869 crore,the most in the past seven quarters. Outflows in this category was higher as the liquid/money market funds saw significant outflows of R76,537 crore in March as tight liquidity and the need to balance the books for the fiscal year-end prompted banks and corporates to pull out money. Income funds also saw consistent outflows in January (R2,926 crore),February (R2,527 crore) and March (R7,654 crore).
Gold ETFs saw inflows to the tune of R398 crore in the March quarter,the lowest in the last seven quarters. Market participants believe that high prices of gold deterred investors from investing in the yellow metal in the last quarter of FY12. The inflows in gold ETFs at R1,716 crore in the second quarter of FY12 was the highest for the period under consideration.
The last three quarters have been particularly tough for the mutual fund industry,with net outflows to the tune of R18,361 crore and R17,760 crore posted in third and second quarters of financial year 2012.
The industrys average AUM for the March quarter of FY12 stood at R6.7 lakh crore,a 2.4% decline over the previous quarter and a 10% decline over the April-June quarter of FY12.
Currently there are 44 fund houses in the country and most of the smaller players are struggling to survive in the current environment,in which the stock markets have been weak,and are posting fairly large losses.
In August 2009,market regulator Sebi had banned entry loads of 2.25% paid to distributors. The move has resulted in a large number of distributors giving up the business.