Equity AUMs shrink as markets saw biggest-ever monthly fall in 21 months

Assets under management (AUM) of prominent equity sub-categories shrank in November as markets saw their biggest-ever monthly fall in 21 months.

Concerns around the spread of the Omicron variant, US Federal Reserve’s hawkish turn, and sharp selling by foreign portfolio investors (FPIs) were some of the factors that weighed on market performance. The benchmark Sensex fell 3.8 per cent — the most since March 2020.

The large-cap fund category saw AUM decrease by Rs 6,433 crore to Rs 2.14 trillion at the end of November, from Rs 2.2 trillion in October, reveals the data from the Association of Mutual Funds in India. The flexi-cap segment saw nearly Rs 3,800-crore drop in assets.

D P Singh, chief business officer, SBI Mutual Fund, says, “There might have been some redemptions since equity markets witnessed correction. Investors might have reallocated some money to small-cap funds.”

The small-cap and sectoral funds, however, saw an increase in their AUM by Rs 1,360 crore and Rs 466 crore, respectively.

In the past few months, equity funds have continued to witness inflows due to a strong systematic investment plan (SIP) book and new fund offers launched by fund houses.

Even as a few categories have seen a fall in their AUM, industry participants are hopeful that the SIP tally will be more than Rs 10,000 crore.

So far in 2021-22, inflows via SIP have been over Rs 66,973 crore.

In November, they bought shares worth nearly Rs 19,258 crore, helping offset the sharp selling by FPIs. Industry players say the balance advantage funds increased their equity exposure amid weakness in the market.