Informist, Thursday, Jun 9, 2022
By Kshipra Petkar
MUMBAI – The mutual fund industry saw net outflows of 75.3 bln rupees in May, primarily because of outflow from the open-ended debt funds. The industry had seen net inflows of 728.5 bln rupees in April.
Assets under management of the industry fell 2.1% on month to 37.2 trln rupees as on May 31.
Open-ended debt funds saw net outflow of 327.2 bln rupees as investors continued to take profits in funds that were on the longer end of the yield curve. Assets under management of these funds fell 2.5% on month to 13.2 trln rupees as of May 31.
Among specific categories of open-ended debt funds, liquid funds saw net inflows of 17.8 bln rupees and overnight funds saw net inflows of 150.7 bln rupees. Money market funds saw net outflows at 146 bln rupees in May.
“This (outflows from open-ended debt funds) is expected in the sense that when the rates are being hiked by the central bank then the duration funds will show some negative trends and that is exactly what we are seeing at this point,” Association of Mutual Funds in India Chief Executive N.S. Venkatesh said.
Open-ended equity funds saw net inflows at 185.3 bln rupees in May. Its assets under management fell 3% on month to 13.3 trln rupees as on May 31.
Within the equity category, flexi cap funds saw the highest net inflows of 29.4 bln rupees, followed by large-cap and large- and mid-cap funds at 24.85 bln rupees and 24.14 bln rupees, respectively. All equity categories registered net inflows in May.
“There is a positive inflow (in equity funds) and that too without any new fund offers during this month. So this is mainly the secondary market flows coming in. The retail investor confidence into equity asset class stems from the fact that India growth story continues to be promising and intact relative to other major economies,” Ventaksh said.
“Despite rising inflation and interest rates, challenging macroeconomic scenario, GDP forecast continues to be pegged at 7.2 per cent by RBI. DII investment flows into Indian equities continue to be robust, despite FII outflows,” he added.
Open-ended hybrid funds saw net inflows at 51.2 bln rupees in May, lower than the 72.4 bln rupees in April. Assets under management in the hybrid fund category fell 0.5% on month to 4.8 trln rupees as on May 31.
Within the hybrid category, balanced advantage funds saw the highest net inflows of 22.5 bln rupees.
‘Other’ exchange-traded funds and index funds saw net inflows of 60.6 bln rupees and 57.2 bln rupees and respectively.
Net inflows into systematic investment plans rose to 122.9 bln rupees in May from 118.6 bln rupees in April. Assets in systematic investment books came in at 5.7 trln rupees as at the end of May, compared to 5.8 trln rupees a month ago. End
Edited by Akul Nishant Akhoury
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