Mutual Funds suffer nearly Rs 1.60 lakh cr outflow in June: AMFI data

According to data by Association of Mutual Fund of India (AMFI), investors pulled out Rs 1.60 lakh crore on a net basis from mutual fund schemes in June against a net investment of Rs 76,989 crore in May. The main reason behind it is the persisting weak confidence in debt-oriented plans. The data reveals that net outflows from debt-oriented schemes were more than Rs 1.71 lakh crore in June against inflows of Rs 70,119 crore.

Recently, the mutual fund industry has been grappling with redemption pressure in the wake of debt crises at various groups, including IL&FS, Essel and DHFL. “The debt segment saw the largest outflow of Rs 1,71,349 crore as compared to Rs 70,119 crore inflow witnessed in May’19, as investors’ confidence was dented after a series of defaults/delays by some popular names,” Bajaj Capital CEO Rahul Parikh said.

The net outflows of mutual funds stood at Rs 1,59,814.40 crore in June. Debt-oriented schemes witnessed a significant outflow with liquid funds being the worst hit. Liquid funds alone witnessed an outflow of Rs 1.52 lakh crore. AMFI CEO N S Venkatesh said, “This is a usual quarter-end phenomena where the industry does witness temporary redemptions from liquid funds.”

Despite the outflow, the AUM (Assets Under Management) for June 2019, stood higher at Rs 25.81 lakh crores, as compared to Rs 25.43 lakh crore for May 2019, the AMFI said. “Stellar jump in the inflows into equity schemes over the last two months, especially after the decisive electoral verdict has helped repose retail investor trust. Political stability, lower inflation coupled with RBI stance to lower interest rates leading to possible robust growth in the corporate earnings is leading enhanced retail flows towards equity oriented schemes,” Venkatesh said.