India’s mutual fund industry has posted robust growth in the recent past as stock markets bounced back swiftly since the March 2020 crash and as more investors shifted to equities instead of relying only on fixed-income products.
The value of assets managed by the MF industry has increased almost 35% to Rs 37.41 trillion in September 2021 from Rs 27.74 trillion in September 2020, according to latest data from the industry group Association of Mutual Funds in India (AMFI).
Within this, the share of equity-oriented MF schemes has risen to 47.2% of the total industry assets in September 2021 from 40% in September 2020. This indicates an increase in the number of investors in such schemes as also growth in the value of assets held by these schemes.
However, there is a divergence in the MF schemes that have grown their assets under management (AUM) and those with smaller AUMs than before.
Mutual funds launched 32 open-ended and 11 close-ended schemes during July-September. These include 13 equity schemes, 18 debt schemes, six exchange-traded funds (ETFs) and one hybrid scheme. These schemes mobilised a total of Rs 49,283 crore, AMFI data show.
Overall, open-ended equity schemes recorded total redemption of almost Rs 72,500 crore during the second quarter as investors sought to take some profit in the wake of the stock market’s relentless rise. This was up from Rs 55,113 crore in the April-June period.
The flexi-cap, large-cap, mid-cap, small-cap and thematic fund categories recorded strong outflows, but also received fresh inflows in huge quantities. Two categories—Value and contra funds, and tax-saving—recorded net outflows to the tune of Rs 1,193 crore and Rs 2,162 crore, respectively.
A closer look at the data shows the schemes that recorded the highest outflows. Here are those schemes:
The total assets in this category rose to Rs 2.18 lakh crore as of September 30, 2021, from about Rs 1.95 lakh crore three months before, AMFI data show. This segment accounts for nearly 17% of the open-ended equity fund assets.
The funds that recorded the most outflows were HDFC Top 100 Fund (Rs 666 crore). It was followed by Aditya Birla Sunlife Frontline Equity (Rs 649 crore) and ICICI Prudential Bluechip Fund (Rs 613 crore).
These funds had also recorded the highest outflows in the previous two quarters as well.
This is the second-largest segment among open-ended equity funds, barring ETFs. The total assets in this category rose to Rs 2.15 lakh crore as of September 30, 2021, from about Rs 1.76 lakh crore three months before.
The scheme that recorded the most net outflow was HDFC Flexi Cap Fund, which lost Rs 1,380 crore.
Kotak Flexi Cap and Motilal Oswal Flexi Cap were the other key laggards, losing Rs 1,001 crore and Rs 747 crore, respectively, during the second quarter, according to Morningstar data.
The total AUM of mid-cap schemes climbed to Rs 1.53 lakh crore as of September 2021 from Rs 1.35 lakh crore at the end of June. This is 12% of the open-ended equity MFs.
HDFC MF was the laggard in this category, too. The HDFC Midcap Opportunities Fund recorded net outflows of Rs 734 crore.
This was followed by Franklin India Prima Fund, which lost Rs 387 crore, and L&T Midcap Fund, which lost Rs 300 crore, as per Morningstar data.
The total AUM of this category increased to Rs 98,014 crore at the end of September 2021 from Rs 85,957 crore three months before. Small caps form 8% of total open-end equity assets.
During the three months through September, Franklin India Smaller Companies Fund recorded the highest net outflows at Rs 461 crore. It was followed by HDFC Small Cap Fund with Rs 444 crore and L&T Emerging Business Fund with Rs 255 crore from their baskets.
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