New Delhi: Mutual funds' asset base declined 12.5 per cent to Rs 22 lakh crore at September-end over the previous month due to massive outflows from liquid funds and income schemes, according to the industry data.
The asset under management (AUM) of the industry, comprising 41 active players, stood at Rs 22.06 lakh crore at the end of September against Rs 25.20 lakh crore at August-end, the Association of Mutual Funds in India (Amfi) data showed.
The monthly drop in the asset base is mainly due to an outflow of Rs 2.3 lakh crore from mutual fund schemes.
This included Rs 2.11 lakh crore withdrawal from liquid funds or money market segment which invest in cash assets such as treasury bills, certificates of deposit and commercial paper for a shorter horizon.
In addition, income schemes — a type of debt mutual funds that deliver a steady income — have seen a pullout of Rs 32,504 crore. Besides, gold ETFs continued to see a net outflow of Rs 33 crore.
"Income funds have witnessed outflows, which can be partially attributed to negative sentiments due to the IL&FS episode," Kaustubh Belapurkar, Director – Manager Research at Morningstar said.
However, equity and equity-linked saving scheme (ELSS) saw an infusion of Rs 11,250 crore. Besides, balanced funds witnessed an inflow of Rs 731 crore.
"Despite the market volatility and the credit event which occurred, the flows in the equity segment of the market from the retail investors have been positive. It has shown an amount of about Rs 12,000 crore of positive inflows.
"Systematic Investment Plans (SIPs) continue to show an increasing trend with Rs 7,727 crore of funds mobilised in the month of September, AMfi Chief Executive NS Venkatesh said.
Making a similar point, Belapurkar said that equity inflows continue to remain strong on the back of strong SIP numbers as well as investors making use of market volatility to make fresh investments.
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.