MF industry AUM declines by 2.83 per cent in May

India’s mutual fund industry asset under management (AUM) declined by 2.83 per cent or by Rs. 65,927 crore, during the month of May 2018, led by debt funds, according to latest data from the Association of Mutual Funds in India (AMFI). The net outflow for the month was Rs. 50,000 crore. Nevertheless, the net outflow figures mask the trend in the mutual fund investment.

It is only debt funds that have witnessed outflow in the month of May 2018, while the equity funds have witnessed inflow during the same period. Debt funds including Income, Liquid/Money Market and Gilt funds witnessed an outflow of Rs. 20,407 crore, Rs. 46,724 crore and Rs. 428 crores respectively in the month of May 2018. One of the reasons for such outflow may be rising yields and hence investors may be exiting income and gilt funds. Moreover, redemption from corporate may also be responsible for such outflow.

The pure equity funds in the month of May 2018 saw a net inflow of Rs. 10,444 crore. Equity Linked Saving Schemes (ELSS) saw an inflow of Rs. 906 crore in the same month. Total equity AUM (including Equity Schemes and ELSS) at the end of May 2018, stood at Rs. 7,41,118 crore compared to Rs. 7,44,065 crore at the end of April 2018. This shows that the equity AUM dropped marginally by 0.4 per cent. The fall in AUM despite an increase in inflows is attributed to the mark to market losses by equity funds.