NEW DELHI :
The asset base of equity mutual funds surged 21% to over ₹7 trillion during the June 2020 quarter, primarily on account of rebound in markets and backed by strong SIP inflows, a Morningstar India report said on Thursday.
However, inflows during the quarter declined sharply to ₹11,710 crore compared to ₹30,703 crore in the January-March 2020 period, primarily due to increased redemptions in June as investors booked profits.
Of ₹11,710 crore investment in the June 2020 quarter, the schemes attracted ₹6,213 crore in April, ₹5,256 crore in May and ₹240.55 crore in June, which was the lowest investment level in four years.
"Tepid investor sentiment along with profit booking has led to a decline in net inflows since April," the report noted.
It further said few top-performing funds continue to draw bulk of the inflows, particularly funds in the large-cap focused and multi-cap categories, while under-performing funds witnessed outflows.
The asset base of equity mutual funds rose 21.2 per cent to ₹7.01 lakh crore by June-end from ₹5.78 lakh crore at the end of March.
According to Morningstar, equity AUM rose as a result of rebound in markets, backed by strong monthly SIP (Systematic Investment Plan) flows, which averaged ₹8,139 crore in the second quarter of the calendar year 2020.
Investors prefers SIP as it helps them in rupee cost averaging and also in investing in a disciplined manner without worrying about market volatility and timing the market.
The overall industry's assets under management (AUM) rose 14.5% to ₹25.49 trillion in the quarter ended June from ₹22.26 trillion at the end of March quarter.
The 45-player mutual fund industry witnessed over ₹1.24 trillion inflow across the schemes in the June quarter.
Of the total inflow, banking and PSU funds witnessed an inflow of ₹20,912 crore, while the same for corporate bond funds was ₹18,738 crore as the flight to safer assets continued.
In addition, investors put in ₹20,930 crore in arbitrage funds.