MF Update: MF AUM increased marginally in July 2018

The total domestic asset under management (AUM) of Indian mutual fund saw a modest increase of 1 per cent on monthly basis in the month of July 2018. It touched the figure of Rs 23.05 lakh crore at the end of July. The growth was primarily led by inflows to equity funds and mark to market gain. Equity AUM of the industry touched Rs. 11 lakh crore, a record high. Equity schemes excluding, Arbitrage funds, ELSS and balanced funds contributed 30 per cent to total AUM compared to 28 per cent in the month of June 2018.

Despite inflows to equity funds, they continued to see a downward trend. It has been the lowest in the last four months. In the month of July 2018, total inflows were to the tune of Rs. 8,512 crore compared to Rs. 8,794 in the month of June. This is despite better show by some of the mid-cap funds that were able to beat their benchmarks and performed better than the broader as well as frontline indices. Nevertheless, the investment in ELSS continued to show good growth. Compared to Rs. 866 crore in the month of June, it recorded inflow of Rs. 940 crore in July 2018. Besides, arbitrage funds also saw an inflow of Rs. 1,133 crore in the month of July. ETFs other than gold saw major outflow in the month of July, while Rs. 3,892 crore of outflow was seen from ETF in the month of July, which many market experts believed is due to profit booking by EPFO.

A major outflow was witnessed in debt funds. Income, Gilt and Liquid funds all saw net outflow in the month of July. Money market saw net outflow to the tune of Rs. 31,141 crore while income fund saw an outflow of Rs. 7,950 crore. Outflow from the debt fund may be due to institutional redemption due to volatility and uncertainty in the interest rate scenario.