With the consecutive months of detrimental returns on Dalal Street, the Asset Under Management for the mutual fund trade dropped to an 11-month low in June, information sourced by Motilal Oswal confirmed. “Total AUM for the mutual fund (MF) industry declined for the second consecutive month to Rs 35.6 trillion (-4.2% MoM) in June 2022 — the lowest level since August 2021 — led by a decline in AUM for income (Rs 711 billion), equities (Rs 405 billion), liquid (Rs 219 billion), other ETFs (Rs 115 billion,” the report stated. While the AUM has come down, inflows into mutual funds stay robust with continued SIP flows and decrease redemptions.
AUM falls however SIP inflows stay regular
Data confirmed that fairness AUM for home MFs, together with ELSS and index funds, decreased 2.9% sequentially to Rs 13.8 trillion in June. “This was due to a decline in equity scheme sales (down 7.6% MoM to Rs 355 billion). Further, market indices closed lower,” analysts at Motilal Oswal wrote. The Nifty 50 index was down 4.8% in June, after having registered a 3% decline in May. This was the third consecutive month the place the Nifty 50 registered a fall. The headline index reported the steepest one-month decline since March 2020.
While AUM for mutual funds dipped, redemptions have been down 15.4% sequentially to Rs 127 billion — at a 25-month low. Net inflows declined marginally to Rs 228 billion in June 2022, from Rs 234 billion in May. This was anchored by SIP contributions which stay robust with the tenth straight month of greater than Rs 100 billion funding. SIP inflows have been at Rs 122.8 billion.
Sectoral weightage modifications
Sectorally, fund managers confirmed an curiosity in cars, oil & fuel, client, healthcare, telecom, and PSU banks resulting in a rise of their weights on a month-on-month foundation. Auto sector weightage was up 0.5% as the worth of the sector elevated 4%. Oil and fuel sector’s weight elevated by 0.2% whereas the worth of the sector slipped by 1.1%. Consumer, healthcare, PSU Bank, and telecom sector weightage have been elevated by 0.1% every. Among these solely, the telecom sector noticed a development in worth by 0.7% whereas others reported a decline.
On the opposite hand, non-public banks, metals, NBFCs, cement, retail, utilities, textiles, insurance coverage, and chemical compounds noticed on-month moderation in weights. Private banks’ weightage was down 0.4% whereas their worth dropped 5.7% in June. Metals weight was down 0.3% after a whopping 14.7% decline in worth.
Overall, fund managers have the very best weightage attributed to non-public lenders at 17.5%, adopted by 11.5% for know-how shares, 7.6% for cars, and seven.3% for NBFCs.
Source: www.financialexpress.com”