According to the Association of Mutual Funds in India (AMFI), the Assets Under Management (AUM) of the Indian mutual fund industry came in at Rs. 22.41 lakh crore in January 2018, up from Rs. 21.38 lakh crore in December 2017. The calendar year started on a high note and AUM of the Equity category crossed the milestone of Rs. 7 lakh crore.
Notably, AUM of Equity (including Equity Linked Savings Schemes or ELSS), Balanced funds, other ETFs for January 2018 touched an all-time high of approximately Rs.10.36 lakh crore.
The total net inflow for January 2018 stood at Rs. 1,06,159 crore with the maximum inflow of Rs. 96,552 crore witnessed in the Liquid category. Equity (including ELSS) and Balanced funds saw inflows to the tune of Rs. 15,390 crore and Rs. 7,665 crore, respectively.
Net Equity inflows in Jan at Rs. 15,390 crore
In January 2018, Equity funds (including ELSS) witnessed monthly net inflows of Rs. 15,390 crore, down 4% MoM. The fall in number could be because of investors turning cautious ahead of the Union Budget 2018-19. Cumulative inflows into these funds have surged 166% to Rs. 148,144 crore so far in financial year 2017-18 compared with Rs. 55,689 crore in the Apr-Jan period of financial year 2016-17.
The surge in Equity inflows and higher retail participation can be attributed to investor awareness campaigns by Asset Management Companies (AMCs) and industry body AMFI.
Folio count comes in at 6.83 crore in Jan, up 2.7% MoM
The total folio count at the end of January 2018 stood at 6.83 crore, 2.7% higher compared with December 2017, according to data from the Securities and Exchange Board of India (SEBI). The increase comes amid strong rally in the domestic equity market. The mutual fund industry added close to 18.45 lakh new folios in January 2018 out of which 15.96 lakh were in the Equity category (including ELSS). Approximately 2.5 lakh new folios were added to the Balanced category in the month. There was a further slide in the folio count of Other ETFs category from a high of 8.6 lakh in November 2017 to 7.48 lakh in January 2018.
B15 towns witness AUM growth of 46.2% YoY in Jan
The country’s smaller towns or B15 (beyond top 15 cities) locations accounted for 18.9% of the total industry AUM at the end of January 2018. In the last 12 months, B15 towns have witnessed AUM growth of 46.2% or Rs. 1.37 lakh crore to reach Rs. 4.34 lakh crore at the end of January 2018 compared with Rs. 2.97 lakh crore in the year-ago period. In January 2018, the share of direct plans in B15 towns stood at 20.6% against 45.1% in T15 cities.
Non-associate distributors contributed Rs. 11.90 lakh crore or 52% of the total AUM in the month. Non-associate distributors typically include independent financial advisors, banks and national distributors.
Regulatory updates
SEBI has revised the definition of top cities and beyond top cities for the purpose of additional Total Expense Ratio (TER). The T15 and B15 would be replaced by T30 and B30 by April 1, 2018.
SEBI has asked AMCs to disclose the TER of each scheme on a daily basis on their website in a downloadable spreadsheet (in the format as defined in the circular). The circular has come into effect immediately for new schemes and from March 1, 2018, for existing schemes.
Proposals from Union Budget 2018-19 that would impact the industry:
- Dividend distribution tax @10% will be levied on distributed income by equity-oriented mutual funds
- Long-term capital gains on equities & equity-oriented funds exceeding Rs. 1 lakh will be taxed at 10% without any indexation benefit
