This week in MFs: AUM up 8% in Nov-end but equity inflows dwindled

Mutual funds' asset base rose to a little over Rs 24 lakh crore by November-end, an increase of 8 percent from a month ago led by strong inflow in liquid schemes.

According to data on Association of Mutual Funds of India (AMFI), the asset under management (AUM) of 42-player mutual fund industry jumped from Rs 22.23 lakh crore at the end of October, to Rs 24.03 lakh crore in November-end.

Mutual funds experts said that investments via systematic investment plans continued despite volatile equity market last month.

Amid intermittent bouts of volatility, Sensex and Nifty rose slightly over 4 percent in November.

The industry received Rs 7,985 crore via SIP route in November, a rise of 35.44 percent on a year-on-year basis. While AUM of industry went up, inflows in equity schemes fell.

INFLOWS TUMBLE

Inflows into equity mutual funds, including equity-linked savings schemes, fell the most in seven months due to increased market volatility, global trade war tensions and uncertainty over the upcoming state elections.

Equity inflows fell by nearly 33 percent compared to previous month to Rs 8,414 crore in November, according to data released by the Association of Mutual Funds in India.

Mutual funds expressed concern that while SIP inflows continued in equity schemes, fresh flows in equity funds have slowed down.

 LIQUID FUNDS REGAIN

Liquid funds that witnessed significant redemption in the last two months due to liquidity crisis are back in action.

The liquid or money-market category contributed the most to inflows. It rose for the second consecutive month to Rs 1.36 lakh crore, up by nearly two-and-half times. These schemes are used by companies to park surplus cash.

“Fears of a liquidity crunch have largely abated and investors are realising that and coming back. The monetary policy is also dovish with inflation expectations lowered,” said NS Venkatesh, chief executive officer AMFI.

Last month, inflows into liquid schemes stood at Rs 1.36 trillion in compared to Rs 550 billion a month ago. During IL&FS crisis in September, almost over Rs 2 trillion had flown out of liquid and money market schemes.