Massive outflows squeeze MFs’ AUM by 12.5% by Sept

Mutual funds' asset base declined 12.5 per cent to Rs 22 lakh crore in September-end on the back of massive outflow from liquid funds and income schemes.

According to Association of Mutual Funds in India (Amfi) data, the asset under management (AUM) of the industry, comprising 41 active players, stood at Rs 22.06 lakh crore at the end of September, as compared to a record Rs 25.20 lakh crore in August-end.

The monthly drop in the asset base is mainly due to an outflow of Rs 2.3 lakh crore from mutual fund schemes. This included Rs 2.11 lakh crore withdrawal from liquid funds or money market segment which invest in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon. In addition, income schemes— type of debt mutual funds that deliver a steady income— have seen a pull-out of Rs 32,504 crore. Besides, gold ETFs continued to see net outflow of Rs 33 crore.

"Income funds have witnessed outflows, which can be partially attributed to negative sentiments due to the IL&FS episode," Kaustubh Belapurkar, Director Manager Research at Morningstar said. However, equity and equity-linked saving scheme (ELSS) saw an infusion of Rs 11,250 crore. Besides, balanced funds witnessed an inflow of Rs 731 crore. "Systematic Investment Plans (SIPs) continue to show an increasing trend with Rs 7,727 crore of funds mobilised in the month of September, AMfi, Chief Executive, NS Venkatesh said.

Making a similar point, Belapurkar said that equity inflows continue to remain strong on the back of strong SIP numbers as well as investors making use of market volatility to make fresh investments.

Mutual funds are investment vehicles made up of a pool of funds collected from a large number of investors. The funds are invested in stocks, bonds and money market instruments, among others.