Assets under management with the mutual fund industry jumped a whopping 41 per cent in fiscal 2021 to Rs 31.43 lakh crore, despite a minor 1% decline in March, says a report.
The 1% decline in assets on monthly basis in March was because of net outflows from open-ended debt funds, even though open-ended equity funds for the first time in June 2020 recorded net inflows, according to the industry data collated by Crisil on Friday.
Marc saw net outflows of Rs 29,745 crore, taking down the industry's asset base to Rs 31.43 lakh crore, down from the record high of Rs 31.64 lakh crore in February, registering a whopping 41 per cent growth in the fiscal 2021 over the previous fiscal, said Crisil, adding cumulative inflows equalled Rs 2.09 lakh crore.
Open-ended debt funds record highest on-year net outflows of Rs 52,528 crore in March, the worst seen since the Rs 1.95 lakh crore bleeding in March 2020 after the pandemic scare roiled the markets as money market fund categories bore the brunt of the outflow in the month after corporates and institutional investors redeemed their investments for paying taxes.
Within the category, liquid funds witnessed the highest outflows of Rs 19,384 crore, followed by low duration funds at Rs 15,847 crore. As against this, overnight funds that invest in underlying securities that mature in a day saw the highest net inflows of Rs 5,027 crore in the reporting month. So was floater funds with a net inflow of Rs 3,229 crore.
In fiscal 2021, corporate bond funds, which invest in an underlying portfolio of top-rated papers, emerged as the biggest attraction with net inflows of Rs 69,305 crore. On the contrary, credit risk funds saw the highest net outflows of Rs 28,923 crore.
At an aggregate level, open-ended debt funds ended 3.36 per cent lower in March over February at Rs 13.28 lakh crore which for the full year grew 29 per cent or by Rs 2.99 lakh crore, said the agency citing the Amfi data.
Equity funds see first net inflows in eight months, assets hit fresh high with net inflows of Rs 9,115 crore following net outflows in the previous eight months. Last minute tax-saving investments also favoured equity funds, with equity linked savings scheme recording net inflows of Rs 1,552 crore in the month, the second highest net inflows in the broad segment.
Sectoral/thematic funds saw the highest net inflows within the category at Rs 2,009 crore in March sided by new launches. Multi-cap and value/contra funds were the only categories to see net outflows of Rs 391 crore.
In fiscal 2021, sectoral/ thematic funds recorded the highest net inflows of Rs 9,801 crore, while large-cap funds saw the highest net outflows of Rs 10,587 crore, as investors fretted about costly valuation after the recent sharp run-up in the market.
Mark-to-market gains in the underlying equity market and net inflows helped the open-ended equity assets hit a fresh high in March, adding 1.66 per cent to the assets or adding Rs 16,009 crore to Rs 9.79 lakh crore. For the full year, assets soared 69 per cent or by Rs 4.01 lakh crore.
Equity funds also benefitted from continued inflows through systematic investment plans, getting net flows of Rs 96,080 crore in fiscal 2021 compared to Rs 1 lakh crore of inflows in the previous fiscal.
Volatility in the equity market propelled sharp net inflows into arbitrage funds and dynamic asset funds with a combined Rs 5,799 crore in March, increasing assets by 1.4 per cent to Rs 3.43 lakh crore while net inflows amounted to Rs 6,210 crore, the highest since net inflows of Rs 8,652 crore in May 2020.
In fiscal 2021, arbitrage funds that cash in on market volatility saw the highest net inflows of Rs 26,908 crore, while aggressive hybrid schemes logged in highest net outflows of Rs 25,847 crore, taking the asset base up by 31 per cent or by Rs 80,807 crore in the fiscal.
For the fifth consecutive month in March, equity exchange-traded funds (ETFs) added Rs 3,632 crore to the asset base, while gold ETFs added just about Rs 662 crore.
In the fiscal, net equity ETF inflows stood at Rs 39,820 crore and gold ETF inflows at Rs 6,919 crore, adding their assets by 88 per cent and 78 per cent, respectively over FY20.