Mumbai: The mutual fund industry’s assets rose in May over April owing to May-end buying, but debt funds were hit by the NBFC defaults and saw outflows.
As May ended, the total assets of the mutual fund industry stood at Rs 25.93 lakh crore, rising from Rs 24.78 lakh crore in April 2019.
Debt funds contributed most to the increase in the total industry assets as liquid funds saw inflows worth Rs 68,582.91 crore.
However, some other categories in the debt fund saw outflows as they have seen investors rushing to withdraw their investments over default risks seen in some non-banking financial companies (NBFCs), housing finance companies and other corporates. Outflow of Rs 4,155.80 crore was seen in Credit Risk Fund, Rs 2,353 crore in Low Duration Fund, Rs 2,063.38 crore in Medium Duration Fund and Rs 1,316.20 crore in Short Duration Fund.
Fixed Maturity Plan/Term Plan schemes also saw an outflow of Rs 1,797.94 crore. FMPs, which invest in debt instruments like corporate bonds, had seen a whopping outflow of Rs 17,644 crore in April.
In contrast, equity fund categories saw inflow of Rs 5,407.75 crore, an improvement over the April figure of Rs 4,608.74 crore.
Balanced Fund continued to see outflow, with the Balanced Hybrid Fund category seeing an outflow of Rs 2,481.15 while Arbitrage Fund saw inflow worth Rs 4,554.40 crore.
However, retail investment through systematic investment plans (SIPs) declined to Rs 8,183 crore from Rs 8,238 crore in April.
Commenting on the May 2019 monthly mutual fund data, N S Venkatesh, Chief Executive Officer, Association of Mutual Funds in India (Amfi) said, “Continued retail investor confidence through SIPs has now set a new normal, with monthly flows consistently crossing over Rs 8,000 crore. On the debt side, investors can take advantage of declining interest rates to invest in Gilt and high-quality income funds.”
Venkatesh said, “The retail fund flows would now further strengthen on the back of political stability, promise of further economic reforms and improving macro-economic environment coupled with healthy corporate earnings growth.”