Lower fund mobilisation, coupled with a decline in markets, led to the assets under management of the mutual fund industry contract the most in nearly three years, according to a Moneycontrol analysis of data released by the Association of Mutual Funds in India on March 12.
Although the industry is sitting at nearly Rs 10 lakh crore in assets compared with the previous year, the net assets under management declined to 4 percent in February from the previous month, its steepest fall since June 2022.
In terms of value, the decline at Rs 2.7 lakh crore is the highest since March 2020, when the industry witnessed a Rs 5 lakh crore decline in assets under management.
By the end of February, the AUM of the industry stood at Rs 64.5 lakh crore compared with Rs 67.2 lakh crore in the previous month. The AUM had hit its peak in November, when the industry had Rs 68.1 lakh crore in AUM.
The BSE Sensex is down nearly 10 percent since November, while Nifty 50 had declined 8 percent between November and February end.
Growth or equity oriented schemes have declined the most during this period, as their AUM was 7 percent lower in February compared with the previous month. Within that segment, it’s the mid cap and small cap funds that have lost out more.
Smallcaps were down 10.4 percent in AUM, while mid cap AUM declined 8.7 percent sequentially.
This trend was also visible in inflows. As funds mobilized across schemes declined 15.6 percent in February, equity schemes witnessed an 18 percent fall, with small cap funds witnessing 27 percent lower inflows than the previous month.
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