Equity AUM increases despite fall in equity inflows

The month of November 2018 saw an arrest of fall in the asset under management (AUM) of equity category. The equity AUM for the month of November stood at Rs. 8.3 lakh crore including arbitrage funds and equity-linked saving schemes. This is up by 4 per cent on a monthly basis. It has been falling since September 2018. The increase in AUM has been against the background of falling inflows. The inflow into equity scheme has declined by 27.6 per cent sequentially to Rs. 21,000 crore for the month. Most of such fall has come due to a decline in lumpsum investments, even as investment through systematic investment plan (SIP) remained constant at Rs. 7,985 crore. Latest AMFI data shows that Indian Mutual Funds have currently about 2.52 crore (25.2 million) SIP accounts through which investors regularly invest in Indian Mutual Fund schemes. The average SIP size of is about Rs. 3,200 per SIP account per month.

It is not only the inflows that have declined, even the redemptions saw a fall of 28.1 per cent MoM to Rs. 10,200 crore, this is the lowest in 23 months. Therefore the net inflows, stood at Rs. 10,800 crore in November 18.

The equity AUM increased despite a fall in the inflows of funds to equity schemes primarily due to the gains made by equity indices. The BSE 500, which covers more than 90 per cent of the total market of Indian equity increased by 4.2 per cent in the month of November 2018, which reflected in the rise of equity AUM. Currently, the equity AUM comprises 5.77 per cent of the total market cap of the Indian equity indices and has remained at this level for a while now.