Assets with MFs cross Rs 14 lakh cr at Apr-end

Inflows back in equity schemes

The mutual funds (MFs) sector has topped Rs 14 lakh-crore in assets under management (AUM), for the first time. April saw addition of Rs 1.4 lakh crore and the overall AUM at the month's close was Rs 14.22 lakh crore, shows data from the Association of MFs in India.

The total had slipped in March due to a net outflow of Rs 73,000 crore. The bulk of April flows were in liquid and money market schemes, where typically companies and financial institutions park their surplus liquidity. The outflow in March was due to the financial year's closing and related demand.

Notably, equity schemes again saw investor flows. After the first net outflow in march, after 22 months, these saw a Rs 4,438 crore net inflow in April.

“March was an aberration. Today's investors are much more mature and see equities with at least a three-year perspective. I believe the current year will continue to see some volatility but that should not deter investors. It's a year of investment before corporate earnings are back on track by FY18,” said Nimesh Shah, managing director of ICICI Prudential MF, the largest fund house.

Other sector executives agree. They say Indian investors, especially those who invest in stocks through MFs, are learning that in troublesome times, it's better to invest more.

“There are various factors emerging now which are helping the economy. The coming few months might be volatile before a clear broader picture emerges. The positive inflows in April depict the fact that there is visible change in investors’ understanding about equities. They know how to use correction and panic times to invest more,” said Pankaj Murarka, head of equity at Axis MF.

All the scheme categories had fresh money flowing in, barring two — gilt funds (which primarily invest in government securities) and gold exchange traded funds. The former saw an outflow of Rs 372 crore and the latter of Rs 69 crore.

Currently, income funds are the category with the largest AUM, of Rs 6 lakh crore or 42 per cent of the sector's assets. Followed by equity (including equity-linked savings schemes) at Rs 4 lakh crore or 28 per cent. Those in the liquid and money market category account for 24 per cent at Rs 3.37 lakh crore, while balanced or hybrid funds command an asset base of Rs 40,000 crore or three per cent of overall assets.