Latest News | MF Assets Scale New Highs in Feb, Breach Rs 31.7 Tn-mark

Mumbai, Mar 10 (PTI) Reversing the January decline, investment in mutual funds increased 3.7 per cent in February, taking the overall assets under management to a new record of Rs 31.6-lakh-crore.

The previous high was in December 2020, when the asset base settled at Rs 31.02 lakh crore, according to the data collated by Crisil.

Inflows into the open-ended debt and hybrid categories, coupled with mark-to-market gains in the equities were the main drivers to the new high, even as outflows from equity funds -- for the eighth straight month -- cumulatively, the fund flows remained negative at Rs 1,844 crore -- capped the gains, according to Crisil analysis.

Dynamic asset allocation schemes saw the highest net inflows since April 2019 at Rs 2,006 crore in February, thanks to the flexibility in asset allocation.

Interest in arbitrage schemes also remained firm, with net inflows at Rs 5,033 crore as market participants looked to take advantage of the volatility in the underlying equity markets.

The hybrid category saw net inflows of Rs 4,703 crore, higher than Rs 2,142 crore in January. But other hybrid categories like aggressive hybrids, equity, savings, and multi-asset allocation categories, saw persistent outflows, though they were cumulatively lower at Rs 2,481 crore in the month compared to the Rs 3,823 crore in January.

At the aggregate level, the asset base of hybrid schemes grew 6.6 per cent or by Rs 20,971 crore to Rs 3.38 lakh crore in February, which is the highest since February 2020 when it stood at Rs 3.43 lakh crore.

Open-ended debt funds had the lowest net inflows since April 2019, as the Amfi changed its format of dissemination in April 2019, at Rs 1,735 crore. Liquid funds witnessed a reversal of outflows seen in January, adding a net of Rs 17,302 crore in February, leading the inflow tally among debt funds.

Investors also evinced interest in low duration and money market schemes, pumping in Rs 2,844 crore and Rs 9,580 crore, respectively.

Nearly all other categories within the open-ended debt segment saw net outflows. Short duration funds recorded the highest net outflows of Rs 10,286 crore, followed by corporate bond funds at Rs 6,752 crore.

Ultra-short duration, dynamic bond, banking and PSU, and gilt schemes together added Rs 7,956 crore during the month.

But cumulatively, the asset base of open-ended debt funds ended flat at Rs 13.74 lakh crore, while equity funds assets reached a record high despite eight consecutive months of outflows.

The trend in fund flows within the open-ended equity category showed no signs of abating, with net outflows of Rs 10,468 crore in the month, compared to Rs 9,253 crore outflows in January.

Investors booked profits as the underlying domestic equity benchmarks hit record highs in the month -- the Sensex and Nifty rallied 6.1 per cent and 6.6 per cent in the month, respectively.

Introduction/re-categorisation of Flexi- and multi-cap funds had a major impact on inflows for the second consecutive month. While the Flexi-cap category had the highest net outflows of Rs 10,431 crore, multi-cap funds saw the highest net inflows of Rs 4,078 crore.

Amfi recategorised nine multi-cap funds as Flexi-cap funds in the month.

Mark-to-market gains in the underlying equity market helped the open-ended equity category notch up gains of 8.1 per cent or about Rs 71,959 crore in the month.

Though investors continued to pour money into equities via SIPs, the net addition in the month was slightly lower at Rs 7,528 crore compared to Rs 8,023 crore in January, yet the overall open-ended equity asset base settled at a fresh record high of Rs 9.63 lakh crore.

Equity exchange-traded funds (ETFs) garnered net inflows of Rs 1,949 crore, although this was much lower than in the previous two months, Crisil said.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)