Income and debt oriented schemes witnessed net outflows of Rs 171,349.32 crore during June 2019, leading to an overall decline in the assets under management (AUM) of the mutual fund industry. However, growth and equity-oriented schemes witnessed higher inflows during the month.
On the liquid fund outflows, NS Venkatesh, chief executive, Association of Mutual Funds of India (AMFI) said, “this is a usual quarter-end phenomena where the industry does witness temporary redemptions from liquid funds.”
According to the AMFI, AUM of the industry declined to Rs 24,25,040 crore from Rs 25,93,559 crore as on May 31, 2019 due to the outflows from income and debt schemes. The overall average AUM for June 2019, however, stood higher at Rs 25,81,397 crore, as compared to Rs 25,43,248 crore for May 2019 and Rs 25,27,632.75 crore for April 2019.
AMFI said net inflows for the open-ended growth and equity-oriented schemes have been consistently rising for the last three months since April 2019, from Rs 4,608.74 crore at the start of the fiscal to Rs 7,663.14 crore for June 2019, largely driven by multi-cap and large cap fund categories.
“On the fixed income side, although there has been outflows from liquid schemes, the flows into gilt schemes and long duration schemes have stood positive, owing to the RBI’s dovish stance on interest rates,” he said.
The net inflows in the equity-oriented schemes have grown three times faster in the last one month at Rs 2,256.37 crore from May 2019 to June 2019, compared to the rise in the earlier month at Rs 797 crore from April 2019 to May 2019.
NS Venkatesh, Chief Executive, AMFI said, “Stellar jump in the inflows into equity schemes over the last two months, especially after the decisive electoral verdict has helped repose retail investor trust. Political stability, lower inflation coupled with the RBI stance to lower interest rates leading to possible robust growth in the corporate earnings are leading enhanced retail flows towards equity oriented schemes.”
According to AMFI, arbitrage schemes continue to witness positive net inflows, albeit lower as compared to May 2019, which has stood in favour of overall net inflows for Hybrid schemes at Rs 862.61 crore.
The trend in SIP contribution for June 2019 continues to be robust at Rs 8,122.13 crore coming from 2.73 crore SIP accounts, AMFI said.