Income schemes was the worst-performing mutual fund category in FY19

The income category has had the worst financial year among major MF categories.

At the end of FY19, the category managed Rs 7.2 trillion worth of assets, which was 8.5 per cent lower than the assets it managed before beginning of the year. From 37 per cent of industry assets as of March 31, 2018, the income category’s share slipped to 30 per cent at the end of FY2019. 

According to experts, the rise in interest rates in the first half of the financial year, combined with the panic caused by the IL&FS crisis in September, hurt investor sentiment. Since September, the category has seen outflows to the tune of Rs 68,349 crore. For the full financial year, the category has seen more than Rs 1.2 trillion of outflows.

The change in asset mix meant that equity schemes emerged as the largest category at the end of the financial year. Equity schemes (includes tax-saving schemes) held onto 36 per cent of industry assets as of March 31.

However, industry players are positive on the future outlook of the income category. "The 50 basis points rate cut by the Reserve Bank of India in recent months should revive the investor sentiments," said a fund manager.

In March, the category garnered Rs 13,856 crore of flows, which was its highest tally in 17-months.