MF update: Asset under management at Rs 25.48 lakh crore in June 2020

The asset under management (AUM) of the domestic mutual fund industry has increased by 3.8 per cent on a monthly basis to Rs 25.48 lakh crore for the month of June 2020.

The increase in AUM was primarily driven by a rise in asset under management of equity dedicated funds. It has increased by eight per cent on a month-on-month basis. At the end of June 2020, the total AUM of equity dedicated funds was at Rs 7.01 lakh crore as compared to Rs 6.5 lakh crore at the end of May 2020.

The rise in equity AUM is due to an increase in the overall equity market. In the month of June, BSE 500 gained as much as seven per cent and Sensex by six per cent. The net inflows are down by 95 per cent in the equity dedicated fund. Gross inflows have remained intact and increased marginally; however, such a drop in the net inflows was led by a 76 per cent increase in redemption. As markets saw a rally of more than 30 per cent from their recent lows, many investors preferred to book profit, which led to a rise in redemption. Multi-cap fund and Large-cap fund saw a net outflow of Rs 777 crore and Rs 212 crore, respectively in the month of June 2020. The value and dividend yield fund also saw a net outflow in the month of June.

Hybrid funds that invest in both equity and debt are another category that saw a huge drop in the net inflows. Even this category saw a huge redemption and net inflows that declined by 96 per cent on a monthly basis. All the sub-categories also saw net outflow except for ‘arbitrage’ funds.  

Under the debt category, the credit risk funds continue to see net outflow and for the month of June 2020, there was net outflow to the tune of Rs 1,493 crore. Overall, the AUM of debt dedicated funds increased by one per cent. Huge net outflows from liquid funds led to overall net inflows declining by 96 per cent on a sequential basis.

Inflows into an exchange-traded fund (ETF) continued to see good traction and for the month of June 2020, it saw net inflows of Rs 4,899 crore, which is up by 100 per cent on a sequential basis.