MF’s total AUMs drop most in three years, while equity assets scale new highs

Mumbai: Mutual fund industry’s total assets under management (AUMs) declined the most in nearly three years in December, on the back of outflows from income and liquid schemes, while equity AUMs, on the other hand, scaled a new record on the back of continued inflows into equity schemes, and a buoyant market.

Mutual funds’ total AUMs dropped 6.21% to Rs21.4 trillion at the end of December, the biggest such decline since March 2015, data from the Association of Mutual Funds of India (Amfi) showed on Friday.

Net outflows from liquid schemes came in at Rs1.3 trillion in the last month, the highest ever and those from income schemes added up to Rs60,151 crore the highest since June 2010.

Fund managers say that such outflows are usual at the end of quarter or year, as companies redeem to pay for advance tax payments and other such obligations.

“There’s nothing to worry about. It is just the typical outflows at the end of a quarter or a year,” said Lakshmi Iyer, head of fixed income, at Kotak Mahindra Asset Management Co.

On the other hand, equity AUMs scaled another record at Rs7.7 trillion, on the back of net inflows of Rs16,087 crore, and a firm equity market.

The benchmark Sensex and Nifty rose 2.74% and 2.97%, respectively, in December, taking the gains for the year to 27.91% and 28.65%, respectively.

However, such inflows dropped by 20.8%—the biggest such drop since January.