The mutual fund industry saw a net inflow of Rs 1.09 lakh crore in June 2019. That's a 42.4 per cent jump from Rs 76,990 crore during the previous month. "While growth- [and] equity-oriented schemes and exchange traded funds (ETFs) saw net inflow of Rs 1.07 lakh crore and Rs 42,940 crore respectively, income/ debt-oriented schemes witnessed net outflow of Rs 48,320 crore," read the latest Securities and Exchange Board of India Bulletin for July.
In recent months, the mutual fund industry has been grappling with redemption pressure in the wake of debt crises at various groups, including IL&FS, Essel and Dewan Housing Finance Corporation (DHFL). According to industry insiders, investors' confidence was further dented after a series of defaults and delays by some fund houses. For instance, in April, when some fixed maturity plan (FMP) schemes of Kotak and HDFC mutual funds came up for maturity, HDFC AMC had rolled over one of its FMP by 380 days, while Kotak Mutual Fund repaid investors minus their holdings in Essel Group companies.
During June 2019, mutual funds made net investment of Rs 49,803 crore in the Indian securities-secondary market, up over 36 per cent month-on-month. Of this, Rs 6,232 crore was ploughed into the equity securities and Rs 43,571 crore in debt securities. In comparison, May saw Rs 5,164 crore parked in equity and Rs 31,340 crore in debt securities.
"Political stability, lower inflation coupled with RBI stance to lower interest rates leading to possible robust growth in the corporate earnings is leading enhanced retail flows towards equity oriented schemes," N.S. Venkatesh, CEO of the Association of Mutual Fund of India (AMFI), told PTI earlier this month.
However, despite the net inflow, the net assets under management (AUM) of all mutual funds actually dipped last month. The AUM decreased by 8.2 per cent to Rs 23.79 lakh crore at the end of June from Rs 25.94 lakh crore in end-May. According to the bulletin, the total number of mutual fund schemes in the market has gone up from 1,954 to 2,042 in the same time frame. Of the latter, 1,354 were income and debt-oriented schemes, 554 were growth and equity-oriented schemes, 78 were ETF schemes, and the rest were hybrid schemes and fund of funds (FOF) investing overseas.