PTI

Mumbai: Country’s mutual fund industry witnessed a 5.9% drop in its assets in June, buckling under the pressure of the meltdown in the stock market and the slow growth in the fixed income schemes in the month.

The combined average assets under management(AUM) of the 33 fund houses in the country dropped to Rs 5,64,599.28 crore at the end of June as compared to Rs 6,00,266.32 crore in May, according to data released by the Association of Mutual Funds in India.

“The main reasons, which impacted the growth in assets were the advance tax payments by corporates at the end of June, which led to almost no growth in the fixed income schemes, while equity investments were obviously impacted by the fall of about 18 per cent in the Sensex,” mutual fund tracking firm Value Research Online CEO Dhirendra Kumar said.

Reliance Mutual Fund continues to be the top fund house in the country despite its average AUM falling to Rs 90,813.45 crore at the end of June from Rs 98,430.93 crore in the previous month.

However, ICICI Prudential, the second largest mutual fund, witnessed a marginal gain of Rs 413 crore in its assets at Rs 59,473.58 crore as against Rs 59,060.02 crore in the previous month.

Taurus Mutual Fund Director R K Gupta believe that more than the equity side, the assets may have been impacted by banks and corporates pulling out from income schemes because of the hike in interest rates.

“July could be the worst hit period for the mutual funds as withdrawals from corporates and banks in these schemes are likely to increase further,” Gupta added.