Equity fund flows, market gain lift MF assets

With the Sensex scaling new highs, the mutual fund industry has registered an increase of ₹6,300 crore in August to ₹10.12 lakh crore in the asset under its management. The assets under management stood at ₹10.06 lakh crore in July.

According to the Association of Mutual Funds in India data, the equity-focused funds registered an inflow of ₹5,217 crore in August. However, the fund flow has halved compared with ₹10,815 crore logged in July.

The BSE benchmark index, Sensex moved up 3 per cent in August

However, the income and liquid funds registered a net outflow of ₹12,696 crore and ₹5,864 crore. Balanced funds and equity-linked saving schemes attracted inflows of ₹448 crore and ₹147 crore respectively, while exchange-traded funds (ETFs), excluding gold, registered an inflow of ₹51 crore.

The sharp outflow from income and liquid funds eroded fresh fund inflows into the industry, resulting in a total outflow of ₹13,035 crore. Gold ETFs registered an outflow of ₹112 crore to ₹7,661 crore in August.

The mutual fund industry’s assets in equities increased to ₹2.34 lakh crore in August compared with ₹2.21 lakh crore in July while that of liquid funds was up at ₹2.45 lakh crore against ₹2.44 lakh crore in July. However, income fund assets dipped to ₹4.61 lakh crore (₹4.71 lakh crore). Balanced fund assets moved up to ₹17,293 crore from ₹16,217 crore in July.

Income funds topped the list of contributors to the mutual fund industry’s assets accounting for 46 per cent, followed by liquid and equity funds contributing 24 per cent and 22 per cent, respectively. Interestingly these three categories of funds account for 92 per cent of the total AUM.

Chandresh Nigam, Managing Director, Axis Mutual Fund, said the inflows into equity funds would continue though it is lower in August compared to the preceding month as the sentiment is still positive.

“The change in tax treatment on income funds had unsettled investor interest in income schemes. Most of the investors in this scheme look at a one-year period for exit with tax benefit. A large portion of investments in bank deposits are of one-year periods,” he said. However, he added, outflow from income schemes have slowed down and will start seeing inflows in the coming days.