The mutual fund industry’s asset under management (AUM) rose to a record high in April to Rs 19.26 lakh crore, aided by good inflows in both debt and equity schemes and a new high in the equity market.
The sharp rise in AUM by 9.78 per cent, or Rs 1.71 lakh crore, from Rs 17.54 lakh crore in March, was aided by a Rs 99,403 crore inflow into the money market funds as companies reinvested in these funds at the beginning of the new quarter in April 1.
This category, according to the Association of Mutual Funds in India (Amfi) data, had seen an outflow of Rs 15,147 crore in March, as companies usually take out money at the close of the quarter to show it in their balance sheets.
Income fund category saw an inflow of Rs 36,647 crore in April compared to an outflow of Rs 56,247 crore in the previous month, as investors rushed to invest in mutual funds, with falling interest rates making bank fixed deposits and small saving schemes unattractive.
Equity schemes saw an inflow of Rs 9,429 crore, of which Rs 8,842 crore came into pure equity schemes, much higher than Rs 5,310 crore in March, and Rs 587 crore into equity-linked savings schemes (ELSS).
The monthly gains in benchmark indices Nifty 50 and Sensex were just 1.31 per cent and 1 per cent, respectively, but the broader market made good gains, led by bank and steel sector stocks and small-cap stocks. As a result, the total AUM of pure equity schemes stood at Rs 5,04,971 crore and that of ELSS at Rs 63,799 crore.
Inflows of Rs 7,136 crore into the balanced funds, against Rs 5,952 crore in March, added to the overall good inflows across all equity oriented schemes, aided by the positive outlook for Indian equity and debt markets.
Anup Maheshwari, executive vice-president and head of equities, DSP BlackRock Mutual Fund, in his outlook for equities, said: “India is well-placed on growth and liquidity. Macro conditions are improving, the entrepreneurial environment is positive, and there is good value creation potential in a host of businesses. We believe that equities will continue to be an asset of choice over the next decade.”
Commenting on Amfi’s data on mutual fund net inflows, Rahul Parikh, chief executive officer, Bajaj Capital, said FY18 has made a good start with high growth in net inflows into equity and debt in April. “Equity overall (Equity, Balanced, ELSS, Overseas) has seen an almost 20 per cent rise in net inflows in April'17 i.e. Rs 16,525 crore as compared to Rs 14,123 crore in March'17,” he said.
raviranjan@mydigitalfc.com