Data for June released by AMFI showed net outflows of Rs 23,119 crore from several debt categories (classified as ‘income funds’ by AMFI). This category does not include gilt (government securities) funds but they also saw a net outflow Rs 506 crore.
Liquid Funds, on the other hand, saw net inflows of Rs 52,104 crore but this category is usually just a placeholder for corporates to park short-term money. Liquid fund inflows also indicate investors moving to the sidelines rather than taking a definitive view on the markets. However, the inflows into liquid funds allowed the total industry AUM to edge up from Rs 22.59 lakh crore to Rs 22.86 lakh crore.
Equity fund net inflows fell from Rs 10,444 crore in May to Rs 8,794 crore in June 2018, a 16% drop. Balanced funds also saw net flows drop from Rs 2,666 crore to Rs 1,482 over this period. Tax Saving (ELSS) Funds saw a fall in net inflows from Rs 906 crore to Rs 866 crore in June.
The subdued performance of major mutual fund categories is likely to have been a major factor behind the slowdown. Unlike large-cap funds (one year return of 10.44%), the mid and small cap categories have posted one-year returns of 3% and 1.78% on average. Hybrid Fund categories have posted returns of 5.8% and lower. Debt funds saw returns ranging from just 0.04% (long duration) to 5.35% (credit risk). Liquid funds and ultra-short duration bond funds were the best performers among debt funds with returns of 6.86% and 6.5% respectively.
|Category||Net Inflows (May 2018)||Net Inflows (June 2018)|
Source: AMFI, Figures in Rs Crore