After witnessing net outflows in two consecutive quarters, the mutual fund industry saw net inflows in the September quarter of the financial year 2022-23 (Q2FY23), a report by rating agency ICRA stated. According to AMFI, overall net inflows in the mutual fund industry came in at ₹0.47 lakh crore against a net outflow of ₹0.05 lakh crore in Q1FY23. Significant decline in net outflows in Debt Oriented Schemes led to the upside, the report noted.
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Net inflows were seen in two out of three months of the quarter, the third month saw net outflows, it added.
Assets under management (AUM)
The asset base of the Mutual Fund (MF) industry ended Q2FY23 on a strong note, said ICRA.
After witnessing a sequential fall in the June quarter of FY23 (Q1FY23), the Quarterly Average Assets Under Management (QAAUM) grew by 3.5 percent in Q2FY23 to ₹39.06 lakh crore, the highest sequential growth in three quarters, said the ICRA report.
ICRA further informed that the QAAUM grew 7.9 percent YoY, marking a growth for the ninth consecutive quarter.
Meanwhile, the total AUM of the MF industry rose 7.8 percent sequentially and 4.6 percent annually to ₹38.42 lakh crore in Q2FY23, it added.
While the volatility in the stock markets, weakening rupee, and soaring inflation led to a decline in inflows in the equity-oriented schemes, they remained positive for the sixth straight quarter in the September quarter, noted the report. This also indicates that they witnessed inflows for the nineteenth straight month in September 2022.
It further informed that despite witnessing net inflows in all three months of the September quarter, net inflows of equity-linked savings scheme (ELSS) declined nearly 41 percent sequentially to ₹0.29 lakh crore.
Under open-ended schemes, all sub-categories saw net inflows but none of them saw growth in net inflows in percentage terms, said ICRA.
The total number of folios went up by 2.5 percent QoQ and 23.7 percent YoY to ₹13.81 crore at the end of the September quarter, noted ICRA. Category-wise, all Open-Ended
categories except Debt -Oriented schemes (-0.9 percent) witnessed growth in September 2022 vis-à- vis June 2022, it added.
Under the debt category, while Long Duration Fund saw the highest sequential growth, the Medium to Long Duration Fund saw the highest sequential decline, as per ICRA.
Meanwhile, under the equity category, no sub-category saw a sequential decline, informed ICRA. The highest growth was witnessed in SmallCap Funds while the lowest growth was seen in large-cap funds.
Under hybrid schemes, as per ICRA, only Arbitrage Fund saw a QoQ decline.
Further, the composition of the top 5 categories remained unchanged for the 4th straight quarter which accounted for 46.5 percent of the total folios, informed ICRA. ELSS continued to top the chart followed by Large-cap funds.
Equity investment in Q1FY23
Individual investors held 52 percent of their equity investments for over 12 months vis-à-vis 51 percent in the previous quarter, noted ICRA.
It also pointed out that holdings by institutional investors surged significantly to 15 percent of their equity investments for over 12 months against 9 percent in the previous quarter.
Debt investment in Q1FY23
As per the report, individual investors held 20 percent of their debt investments for over 12 months against 21 percent in Q4FY22.
Institutional investors held 21 percent for over 12 months vis-à-vis 20 percent in Q4FY22, it added.
Systematic Investment Plan (SIP) Contribution in the September quarter came in just below the ₹13,000 crore mark, noted the report. It further informed that after witnessing a quarterly decline in June 2022 quarter, the SIP contribution saw quarterly growth of 5.7 percent to ₹12,976 crore in Q2FY23.
Also, SIP accounts grew 5.2 percent QoQ to 5,84 crore, it added.
Only five AMCs (asset management companies) witnessed a quarterly decline in Q2FY23 compared to 24 AMCs in the previous quarter. The top 10 compositions (accounting for 81 percent of QAAUM) remained unaltered for the ninth quarter in a row in Q2FY23; none of them declining sequentially, stated ICRA.
The top five AMCs with sequential growth, according to ICRA were:
• White Oak Capital Mutual Fund (422.9 percent)
• Navi Mutual Fund (28.3 percent)
• Quant Mutual Fund (26.9 percent)
• Shriram Mutual Fund (21.8 percent)
• Union Mutual Fund (15.6 percent)
Some other interesting facts
- Among the top 10 AMCs, SBI Mutual Fund saw the highest sequential growth (5.4 percent) while gaining maximum market share (0.3 percent) on a quarterly basis.
- Despite witnessing the second-highest sequential growth, DSP Mutual Fund continued to remain in the 10th position.
- Kotak Mahindra Mutual Fund lost its maximum share (0.25 percent) followed by Aditya Birla Sunlife Mutual Fund (0.22 percent).
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