Industry AUM up 24% YoY; declines marginally on MoM basis
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. 22.20 lakh crore in February 2018, down from Rs. 22.41 lakh crore in January 2018.Compared with January 2018, there was a marginal decline in AUM across all categories except Liquid and Infrastructure Debt funds. However, it was up 24.1% from Rs. 17.89 lakh crore in February 2017.
AUM under Equity (including Equity Linked Savings Schemes or ELSS), Balanced funds, other ETFs for February 2018 came in at Rs. 10.21 lakh crore as against Rs.10.36 lakh crore in January 2018.Meanwhile, it surged approximately 60% from Rs. 6.37 lakh crore in February 2017.
Net Equity inflows up 5.7% MoM
Despite the stock markets declining, net inflows into Equity mutual fund (MF) schemes continued to remain strong. In February 2018, Equity funds (including ELSS) witnessed monthly net inflows of Rs. 16,268 crore, up 5.7% MoM and more than 150% YoY. The increase was mainly driven by sustained inflows through Systematic Investment Plans (SIPs). According to data from AMFI, cumulative SIP contribution has been Rs. 53,646 crore so far in FY2018 (data updated till Jan 2018).
Net inflows in the Balanced category came in at one-year low of Rs. 5,026 crore – the decline could be because of the government announcing the imposition of dividend distribution tax in Budget 2018-19.
The income category witnessed net outflows to the tune of Rs. 9,799 crore possibly because of rise in yields.
The total net inflow for February 2018 stood at Rs. 12,092 crore with the maximum inflow of Rs. 14,683 crore witnessed in the Equity category.
15.72 lakh new folios added despite volatile markets
The total folio count at the end of February 2018stood at 6.99 crore, 2.3% higher compared with January 2018, according to data from the Securities and Exchange Board of India (SEBI). Themutual fund industry added approximately 15.72lakh new folios in February 2018 out of which 13.65 lakh were in the Equity category (including ELSS). Approximately 1.8 lakh new folios were added to the Balanced category in the month.
B15 towns account for 18.8% AUM in Feb 2018
The country’s smaller towns or B15 (beyond top 15 cities) locations accounted for 18.8% of the total industry AUM at the end of February 2018. In the last 12 months, B15 towns have witnessed AUM growth of 41.7% or Rs. 1.28 lakh crore to reach Rs. 4.36 lakh crore at the end of February 2018compared with Rs. 3.08 lakh crore in the year-ago period. Non-associate distributors contributed Rs. 11.86 lakh crore to the current month or 51% of the total AUM. In February 2018, the share of direct plans in B15 towns stood at 20.4% against 45.6% in T15 cities.
Regulatory updates
SEBI has clarified in a circular that mutual fund schemes, including close-ended schemes, wherein exit load is not levied or not applicable, mutual fund houses shall not be eligible to charge an additional 20 bps TER in lieu of exit loads for such schemes.
SEBI has extended the deadline to implement the new set of rules under fund governance to ensure smooth transition. Existing independent trustees and independent directors, who have held office for nine years or more as on November 30, 2017, will be allowed to continue in their respective position for a maximum of one additional year.
