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MF assets dip by ₹97,000 crore in September on corporate redemption

Liquid funds record ₹1.58 lakh crore outflow; SIP inflows show marginal fall

The total assets under management (AUM) of mutual funds registered a dip of nearly 4% in September, primarily due to huge outflows in the liquid category funds on the back of redemptions by corporates to meet the liquidity demand for advance tax payments.

As per the Association of Mutual Funds in India (AMFI), the AUM fell to ₹24.51 lakh crore in September from ₹25.48 lakh crore in August. Further, liquid funds, which saw inflows of over ₹91,000 crore in August, recorded outflows of ₹1.58 lakh crore in September.

N. S. Venkatesh, chief executive officer, AMFI, attributed the outflows to the quarter-end phenomena wherein corporates redeem their investments in liquid funds to meet their advance tax payment obligations.

Incidentally, such funds saw outflows to the tune of ₹2.11 lakh crore in September 2018.

Meanwhile, equity funds continued to see inflows though the quantum of flows slowed when compared to the previous month. Equity-oriented funds saw net inflows of ₹6,609 crore in September, lower than the ₹9,152 crore seen in August.

Inflows through systematic investment plans (SIPs), which are looked upon as a barometer of retail flows, also registered a marginal dip in September to ₹8,263 crore compared to the previous month’s ₹8,271 crore.

The number of folios, however, rose marginally to 8.56 lakh with the retail AUM also registering an increase to touch ₹11.24 lakh crore.

“We have seen positive growth in the mutual fund market from the retail investors. The regulator has done a phenomenal job in mitigating the risks in the debt market investments. For equity funds, we see the growth is mirroring the markets.

“The new SIP account opening is showing robust growth. SIP is here to stay and when the broader markets show performance, we see SIP outperforming,” said Mr. Venkatesh.

The AMFI chief is of the view that mutual funds will again show a positive trend once the market scenario improves and the recent cut in the corporate tax rates would benefit companies and also improve investor sentiment.

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