It was a good start to 2018. Mutual fund equity assets touched a new high of Rs 10.35 lakh crore in January on the back of a sharp stock market rally; the Sensex was up 6% last month.
- There were a fair amount of redemptions prior to the Budget.
Equity funds (pure equity funds including diversified equity and its categories, and sector funds) received net inflows of Rs 13,404 crore while balanced funds received Rs 7,665 crore. Due to higher redemptions, the net inflows slowed down in January 2018 as compared to December 2017. Equity and balanced funds collectively saw gross redemptions of Rs 34,587 crore in January 2018 as compared to Rs 25,335 crore in December 2017.
While equity funds saw healthy inflows, equity ETFs saw net outflows of Rs 2,234 crore.
- Where were the new funds?
The industry launched 30 new funds in January 2018 and mobilised Rs 7,420 crore. Interestingly, despite the roaring bull run, a majority (25) of them were income funds that mopped up Rs 4,539 crore.
Liquid funds received robust inflows of Rs 96,552 crore in January. In December 2017, the category had seen net outflow of Rs 1.38 lakh crore due to quarter end. The net outflow from income funds narrowed to Rs 9,871 crore in January. The category had seen net outflows of Rs 60,151 crore in December 2017. Morningstar data shows that ultra short-term funds saw the highest outflows followed by short-term bond funds in December 2017. Corporate credit funds saw marginal inflows in December 2017.
Gilt funds, which invest in government securities, saw net outflows to the tune of Rs 1,192 crore in January 2018.
- Mutual funds were on a mobilization roll
Overall, the entire mutual fund industry received net inflows of Rs 1.06 lakh crore, primarily due to robust inflows in liquid and equity funds. As a result, the total assets under management, or AUM, of the industry reached Rs 22.41 lakh crore in January
Net inflow/outflow in January 2018
