The mutual fund industry witnessed an over six per cent drop in its assets under management for the second consecutive month in July, led by country's top fund house Reliance MF, which lost over Rs 6,000 crore in the period.
The combined average assets under management (AUM) of the 34 fund houses in the country dropped to Rs 5,29,629.46 crore in July, as compared to 5,64,752.76 crore in June, according to the data released by the Association of Mutual Funds in India (AMFI).
Analysts believe the bearish sentiments in the market and hardening of interest rates led to heavy redemptions last month leading to the sharp drop in average assets under management.
"The sharp drop in AUMs has been entirely due to heavy redemptions from investors during the month amid the volatility in the stock market...This shows investors are beginning to get impatient," mutual fund tracking firm Value Research Online CEO Dhirendra Kumar said.
Reliance MF registered the biggest drop of over Rs 6,200 crore in its average Assets under Management (AUM) in July.
However, despite a 6.88 per cent fall in its average AUM, Reliance Mutual Fund continues to be the top fund house in the country with assets valued at Rs 84,563.91 crore last month, against Rs 90,813.45 crore in the previous month.
"The stock market have been suffering in the month as the market value of investment is on the decline and the hardening of interest rates has made its difficult for banks and corporates to keep their surplus cash in income schemes, which led to withdrawal of funds from them," Taurus Mutual Fund Managing Director R K Gupta said.
