Mutual Fund Update: Domestic MF AUM at 22.86 lakh crore in June 2018

The domestic MF industry’s asset under management (AUM) in the month of June has increased by mere 1.2 per cent on a month-on-month basis. It has reached Rs. 22.86 lakh crore at the end of June 2018. The increase in AUM has been primarily led by inflows in liquid/money market segment, which saw an inflow of Rs. 52.104 crore. It was followed by inflows in equity schemes, which witnessed a total inflow of Rs. 8,794 crore. ETF is the other segment saw huge inflows to the tune of Rs. 8,313 crore.

In terms of outflows, ‘income funds’ and ‘arbitrage funds’ saw a huge redemption. In the month of June 2018, these funds saw an outflow of Rs. 23,119 crore and Rs. 1,426 crore respectively.

One of the disturbing facts is that inflows to the equity have slowed down. Despite equity schemes witnessing an inflow of Rs. 8,794 crore in the month of June, it is lower than Rs. 10,444 crore of inflows in the month of May 2018 and Rs. 13,404 crore at the start of the year, that is January 2018. Volatile equity market with lower returns in the last four months has played a major role in such a slowdown in inflows into equity MF.

The better inflows in the first couple of months have helped the MF industry to post better numbers, year till date. Total inflow has increased by 25 per cent, year till date and reached to Rs. 29,962 crore for the year till June.

Gilt funds have been witnessing a continuous outflow and year till date a total of Rs. 1,370 crore has been redeemed from these funds. The negative returns from the gilt funds due to rising bond yields has been one of the reasons for such negative returns.