New Delhi: Mutual fund industry’s asset base has fallen by nearly Rs66,000 crore to Rs22.6 trillion at the end of May, primarily on account of outflow from income and liquid schemes.
The assets under management (AUM) of the mutual fund industry, comprising 42 players, were at Rs23.25 trillion at April-end, according to the latest update from Association of Mutual Funds in India (Amfi). Overall, investors withdrew a net Rs50,000 crore in mutual fund schemes last month as compared to a net infusion of Rs1.4 trillion in April.
In March, redemptions of Rs50,752 crore were seen due to new tax on long-term equity gains. Industry insiders attributed the drop in assets base to pull outs from income and liquid or money market categories. The liquid funds, which invest in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon, witnessed an outflow of Rs46,724 crore.
Further, income funds which invest in a combination of government securities saw a withdrawal of over Rs20,000 crore. In contrast, investors poured in more than Rs20,000 crore in equity schemes.
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.