Mutual fund AUM, January 2016 - Crisil

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Media note

Mutual fund AUM, January 2016 As per data released by AMFI

Equity retreat shaves mutual fund AUM by Rs 11.2 billion The latest plunge in equities, which began as the world ushered in 2016 and China tripped the global markets, shaved assets under management (AUM) of mutual funds by Rs 11.21 billion, or 10 basis points, to Rs 12.74 trillion in January, according to data from the Association of Mutual Funds in India. What saved the blushes were income, liquid funds and exchange-traded funds (ETFs), including gold-related ones. Not surprisingly, equity funds were battered, and their AUM fell 5.25% to Rs 3.84 trillion, marking the biggest percentage decline in the last 35 months. In absolute terms, AUM shrank Rs 213.12 billion, or the most in 7 years, as mark-to-market losses surged. The Nifty 50, the market bellwether, declined nearly 5% in January. Yet investors seem to keep the faith, as shown in a net inflow of Rs 29.14 billion. This, however, is the lowest absolute growth in 20 months. Since May 2014, equity funds have been seeing net inflows as investors bet on a rebound in the India economy.

Balanced funds remain attractive AUM of balanced funds fell 2.5%, or Rs 10.72 billion, to Rs 411.21 billion primarily led by losses in equity assets. However, investors don’t seem perturbed as the category still managed to attract Rs 8.80 billion, marking the 20

th

consecutive month of net inflows. Represented by the CRISIL Balanced Fund Index, the category lost nearly 3% in value in January.

Global funds see 20th month of outflows Redemption pressures persisted for global funds -- or fund of funds that invest abroad – as concerns over global recovery continued to spook investors. The category saw its 20

th

straight month of outflows in January. Its AUM, which had

touched an all-time high of Rs 32.26 billion in June 2014, has shrunk 42% since to Rs 18.77 billion.

Income and liquid funds rebound after December decline For income funds, AUM climbed 3%, or Rs 166 billion, to Rs 5.72 trillion, driven by inflows and mark-to-market gains. January saw an inflow of Rs 150 billion, which is a rebound considering that in December 2015, there was an outflow of Rs 258.75 billion. AUM of liquid funds edged up 1.6%, or Rs 37.32 billion, to Rs 2.37 trillion, aided by net inflows of Rs 24.55 billion.

Pricier gold lends shimmer Gold ETFs surged almost 6%, or Rs 3.23 billion, to Rs 60.96 billion, led by gain in underlying asset prices. Gold prices, represented by the CRISIL Gold Index, rose 6.9% in January. The category, however, continues to haemorrhage, clocking an outflow for the 32

2

nd

straight month at Rs 0.81 billion.

ETFs continue to get a provident fund lift AUM of ETFs swelled to a new high at Rs 126.45 billion, primarily gaining from the Employees’ Provident Fund Organisation’s decision to invest in the equity market through them. AUM rose 6.4%, or Rs 7.58 billion, led by an inflow of Rs 13.85 billion. Gains, however, were capped by mark-to-market losses.

Table 1 – Month-on-month mutual fund flows and AUM distribution Mutual fund category Income funds

Net inflow/ outflow (Rs billion) Jan-16 Dec-15 2016 Total 150.14 -258.75 150.14

Month-end AUM (Rs billion) Jan-16 Dec-15 Difference 5719.33 5553.64 165.69

Infrastructure debt funds

0.00

0.00

0.00

15.12

15.00

0.12

Equity funds*

29.14

36.44

29.14

3843.50

4056.62

-213.12

Balanced funds

8.80

45.11

8.80

411.21

421.93

-10.72

Liquid / money market funds

24.55

-52.60

24.55

2367.02

2329.70

37.32
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