The assets under management (AUM) of the Indian mutual fund (MF) industry fell by 20% on the back of record outflows, says a report by Crisil Ltd.
On the back of redemptions to the tune of Rs11.27 trillion, the industry saw net outflows (after accounting for inflows) of Rs1.6 trillion, the highest ever in a single month. Crisil adds that such withdrawals have become typical of every financial quarter-end, when mutual funds witness withdrawals by banks and firms.
“During the current quarter, banks’ investments in MFs also came down as credit demand picked up with banks lending a record Rs1.16 trillion in the last fortnight of March. As a result, banks’ investments in MFs reduced by nearly 50% over the month from Rs1.09 trillion as of end February to Rs0.56 trillion as of end March,” says Krishnan Sitaraman, director, Crisil.
The AUMs of gold exchange-traded funds have doubled to Rs15.90 billion as on March in the past one year, says Crisil.