June 2022 quarter repeats debt fund selling story
- India Infoline News Service
- 01 Aug , 2022
- 9:47 AM
The quarterly mutual fund flow data for June 2022 quarter published by AMFI shows strong positive inflows across equity and passive fund assets, moderate flows into hybrid assets and strong selling in debt funds. This is a replica of the trend seen in March 2022 quarter. In fact, June 2022 marks the third consecutive quarter that debt fund flows have been negative, clearly showing the pressure of higher bond yields and diminishing returns. The June 2022 quarter once again showed perceptible bias in favour of equity funds and alternate asset funds; while debt funds faced pressure amidst central banks hawkishness.
As of the close of June 2022 quarter, net AUM of Indian mutual funds stood at Rs35.64 trillion, a loss of -5.14% over the March 2022 quarter. Although the flows into equity funds and passive funds were clearly positive, these flow gains were neutralized by the equity market correction which resulted in value depletion. The equity fund AUM accretion in the June 2022 quarter was triggered by net inflows, but the real story was how the passive flows in the quarter caught up with active funds as fund managers struggled to beat the market. Here is the story of mutual fund AUM in the June 2022 quarter and how the flows into specific categories of mutual funds panned out.
How debt fund flows panned out in June 2022 quarter?
Indian debt funds saw net redemptions of Rs21,160 crore in December 2021 quarter, which deepened to Rs118,010 crore in the March 2022 quarter. The net outflows for June 2022 quarter was only slightly lower than the previous quarter at Rs70,213 crore. Let us look at the key flow drivers and start with inflows? Only gilt funds with 10 year duration saw inflows of Rs706 crore while long duration funds and gilt funds saw smaller inflows. All other categories of debt funds saw strong outflows in the quarter.
The June 2022 quarter saga of debt fund flows veered towards broad-based redemptions. Short Duration Funds saw outflows of (Rs19,704 crore), Corporate Bond funds (Rs13,785 crore), Floater funds (Rs10,845 crore), Banking & PSU funds (Rs8,098 crore), Money Market Funds (Rs6531 crore), Medium Duration Funds (Rs3,814 crore) and Dynamic Bond Funds (Rs3,349 crore). There were other redemption candidates like medium to long duration funds and credit risk funds, but they were relatively smaller.
Total AUM of all debt funds at the close of the June 2022 quarter stood at Rs12.34 trillion with its overall share of MF AUM higher by 5 basis points compared to March 2022 quarter at 34.63%. Despite the sharp redemptions, the debt fund share has gone up sequentially but that is only because equity funds have seen their market share fall due to index correction.
How equity fund flows panned out in June 2022 quarter?
After robust inflows of Rs50,363 crore in the June quarter and Rs41,912 crore in the December quarter, the June 2022 quarter saw net inflows of Rs49,918 crore. What is of interest is that not a single category of equity funds witnessed negative flows in June 2022 quarter. Despite the absence of NFOs, the regular flow of SIPs kept the flows steady. The June 2022 quarter, incidentally, is the third straight quarter when not a single equity fund category showed negative flows.
The positive contributors to equity funds were a lot more affirmative. Flexi-Cap funds + Multi-Cap funds saw positive flows of Rs10,735 crore. In addition, there were positive flows into sectoral & thematic funds at Rs7,813 crore, large & mid cap funds Rs6,458 crore, large cap funds Rs5,875 crore, mid cap funds Rs5,233 crore, small cap funds Rs5,102 crore, focused funds Rs4,018 crore and contra funds Rs2,750 crore. Interestingly, the ELSS category also saw inflows in the June 2022 quarter.
The total AUM of equity funds at the end of the June 2022 quarter stood at Rs12.34 trillion reducing its share by 27 bps over March 2022 quarter to 36.08%. The AUM share of equity funds has come down sequentially; largely due to the index depletion that we saw in the June 2022 quarter. However, equity funds have maintained the share lead over debt funds.
How hybrid fund flows panned out in June 2022 quarter?
In June 2022 quarter, hybrid fund inflows nearly doubled over the March quarter at Rs10,084 crore. However, it could have been much better if NFOs had continued in the quarter. This resulted in the absence of incremental NFO flows into the Balanced Advantage Funds (BAF). However, BAFs still dominated June 2022 quarter with inflows of Rs5,590 crore followed by equity aggressive hybrid funds at Rs3,212 crore, equity savings funds at Rs657 crore and multi asset funds Rs594 crore. However, Arbitrage Funds saw net outflows of Rs493 crore in June 2022 quarter, more due to treasury considerations. Total AUM of all hybrid funds at the end of June 2022 quarter stood at Rs4.71 trillion, growing its AUM market share by 53 bps to 13.21% of total mutual fund AUM.
How passive fund flows panned out in June 2022 quarter?
Passive funds had another fantastic June 2022 quarter with net inflow of Rs41,227 crore, almost at par with the robust March 2022 quarter. There was traction across passive categories. Index Funds/ETFs saw inflows of Rs20,077 crore and other ETFs Rs19,086 crore. Gold funds saw smaller inflows of Rs1,439 crore while FOFs saw inflows of Rs624 crore. Passive funds now contribute 14.62% of total MF AUM; 73 basis points higher than March 2022 quarter.
The big story emanating from the June 2022 quarter mutual funds data, and this is the story of the last few quarters, is that investors are now thinking beyond traditional active equity and active debt funds. If you add up the hybrid funds, solution oriented funds and the passive funds, these have a combined market share of 28.62% of the AUM. Apart from active equities and active debt, these have emerged as the 3rd big asset class for investors.
As of the close of June 2022 quarter, net AUM of Indian mutual funds stood at Rs35.64 trillion, a loss of -5.14% over the March 2022 quarter. Although the flows into equity funds and passive funds were clearly positive, these flow gains were neutralized by the equity market correction which resulted in value depletion. The equity fund AUM accretion in the June 2022 quarter was triggered by net inflows, but the real story was how the passive flows in the quarter caught up with active funds as fund managers struggled to beat the market. Here is the story of mutual fund AUM in the June 2022 quarter and how the flows into specific categories of mutual funds panned out.
How debt fund flows panned out in June 2022 quarter?
| Flows into Debt Funds in the Jun-22 quarter (AMFI) | |||
| Funds Mobilized | Redemptions | Net Flow | Net AUM as of Jun-22 |
| Rs23.83 trillion | Rs24.53 trillion | Rs(0.70) trillion | Rs12.34 trillion |
Indian debt funds saw net redemptions of Rs21,160 crore in December 2021 quarter, which deepened to Rs118,010 crore in the March 2022 quarter. The net outflows for June 2022 quarter was only slightly lower than the previous quarter at Rs70,213 crore. Let us look at the key flow drivers and start with inflows? Only gilt funds with 10 year duration saw inflows of Rs706 crore while long duration funds and gilt funds saw smaller inflows. All other categories of debt funds saw strong outflows in the quarter.
The June 2022 quarter saga of debt fund flows veered towards broad-based redemptions. Short Duration Funds saw outflows of (Rs19,704 crore), Corporate Bond funds (Rs13,785 crore), Floater funds (Rs10,845 crore), Banking & PSU funds (Rs8,098 crore), Money Market Funds (Rs6531 crore), Medium Duration Funds (Rs3,814 crore) and Dynamic Bond Funds (Rs3,349 crore). There were other redemption candidates like medium to long duration funds and credit risk funds, but they were relatively smaller.
Total AUM of all debt funds at the close of the June 2022 quarter stood at Rs12.34 trillion with its overall share of MF AUM higher by 5 basis points compared to March 2022 quarter at 34.63%. Despite the sharp redemptions, the debt fund share has gone up sequentially but that is only because equity funds have seen their market share fall due to index correction.
How equity fund flows panned out in June 2022 quarter?
| Flows into Equity Funds in the Jun-22 quarter (AMFI) | |||
| Funds Mobilized | Redemptions | Net Flow | Net AUM as of Jun-22 |
| Rs91,773cr | Rs41,855cr | Rs49,918cr | Rs12.86 trillion |
After robust inflows of Rs50,363 crore in the June quarter and Rs41,912 crore in the December quarter, the June 2022 quarter saw net inflows of Rs49,918 crore. What is of interest is that not a single category of equity funds witnessed negative flows in June 2022 quarter. Despite the absence of NFOs, the regular flow of SIPs kept the flows steady. The June 2022 quarter, incidentally, is the third straight quarter when not a single equity fund category showed negative flows.
The positive contributors to equity funds were a lot more affirmative. Flexi-Cap funds + Multi-Cap funds saw positive flows of Rs10,735 crore. In addition, there were positive flows into sectoral & thematic funds at Rs7,813 crore, large & mid cap funds Rs6,458 crore, large cap funds Rs5,875 crore, mid cap funds Rs5,233 crore, small cap funds Rs5,102 crore, focused funds Rs4,018 crore and contra funds Rs2,750 crore. Interestingly, the ELSS category also saw inflows in the June 2022 quarter.
The total AUM of equity funds at the end of the June 2022 quarter stood at Rs12.34 trillion reducing its share by 27 bps over March 2022 quarter to 36.08%. The AUM share of equity funds has come down sequentially; largely due to the index depletion that we saw in the June 2022 quarter. However, equity funds have maintained the share lead over debt funds.
How hybrid fund flows panned out in June 2022 quarter?
| Flows into Hybrid Funds in the Jun-22 quarter (AMFI) | |||
| Funds Mobilized | Redemptions | Net Flow | Net AUM as of Jun-22 |
| Rs49,750cr | Rs39,666cr | Rs10,084cr | Rs4.71 trillion |
In June 2022 quarter, hybrid fund inflows nearly doubled over the March quarter at Rs10,084 crore. However, it could have been much better if NFOs had continued in the quarter. This resulted in the absence of incremental NFO flows into the Balanced Advantage Funds (BAF). However, BAFs still dominated June 2022 quarter with inflows of Rs5,590 crore followed by equity aggressive hybrid funds at Rs3,212 crore, equity savings funds at Rs657 crore and multi asset funds Rs594 crore. However, Arbitrage Funds saw net outflows of Rs493 crore in June 2022 quarter, more due to treasury considerations. Total AUM of all hybrid funds at the end of June 2022 quarter stood at Rs4.71 trillion, growing its AUM market share by 53 bps to 13.21% of total mutual fund AUM.
How passive fund flows panned out in June 2022 quarter?
| Flows into Passive Funds in the Jun-22 quarter (AMFI) | |||
| Funds Mobilized | Redemptions | Net Flow | Net AUM as of Jun-22 |
| Rs58,196cr | Rs16,969cr | Rs41,227cr | Rs5.21 trillion |
Passive funds had another fantastic June 2022 quarter with net inflow of Rs41,227 crore, almost at par with the robust March 2022 quarter. There was traction across passive categories. Index Funds/ETFs saw inflows of Rs20,077 crore and other ETFs Rs19,086 crore. Gold funds saw smaller inflows of Rs1,439 crore while FOFs saw inflows of Rs624 crore. Passive funds now contribute 14.62% of total MF AUM; 73 basis points higher than March 2022 quarter.
The big story emanating from the June 2022 quarter mutual funds data, and this is the story of the last few quarters, is that investors are now thinking beyond traditional active equity and active debt funds. If you add up the hybrid funds, solution oriented funds and the passive funds, these have a combined market share of 28.62% of the AUM. Apart from active equities and active debt, these have emerged as the 3rd big asset class for investors.
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How the Indian states stacked up on mutual fund AUM
- 16 Mar , 2023
- 11:29 AM
- Here is the state-wise mutual fund AUM story.
If you were to do an AUM ranking of Indian states, the obvious cynical response would be, “Oh Maharashtra is going to be at the top.” That is bound to happen, since Mumbai happens to be the epicenter of the Indian financial markets. Also, the large base that Mumbai has of banks, insurance companies, corporates and high net worth individuals would ensure that Mumbai in particular and Maharashtra in general will dominate the mutual fund state-wise AUM rankings. However, that would also risk missing out on critical trends that are emerging from elsewhere. Here is the mutual fund AUM story.
How Indian states stacked up on total mutual fund AUM?
The table captures the top 10 Indian states in terms of total mutual fund AUM across all fund categories.
Name of the State / | Total Mutual Fund AUM |
| Maharashtra | 17,01,890 |
| New Delhi | 3,45,690 |
| Karnataka | 2,81,217 |
| Gujarat | 2,79,410 |
| West Bengal | 2,12,786 |
| Tamil Nadu | 1,78,753 |
| Uttar Pradesh | 1,77,086 |
| Haryana | 1,66,848 |
| Others | 1,50,315 |
| Rajasthan | 70,630 |
| Total AUM as of February 2023 | 40,68,800 |
Data Source: AMFI
Maharashtra is clearly in the lead with 41.8% of the all-India AUM. But that still means that nearly 60% of the mutual fund AUM comes from outside Maharashtra. Even if you leave out Maharashtra, there are 4 states with AUM of above Rs2 trillion and 7 states with AUM above Rs1 trillion. With fund houses just about starting their focus on smaller states and cities, this ratio of other states in the overall AUM is only going to increase from here.
How Indian states stacked up on Liquid Funds AUM?
Here we capture the top 10 states in India in terms of liquid fund AUM largely in the very short-term and overnight category.
Name of the State / | Liquid Fund AUM |
| Maharashtra | 3,70,621 |
| New Delhi | 68,700 |
| Karnataka | 47,415 |
| Gujarat | 35,284 |
| Tamil Nadu | 34,555 |
| Haryana | 23,059 |
| West Bengal | 22,952 |
| Uttar Pradesh | 9,986 |
| Telangana | 8,357 |
| Others | 7,225 |
| Total Liquid Fund AUM (Feb-23) | 6,64,489 |
Data Source: AMFI
Here again, the domination of Maharashtra is hardly surprising. In fact, it accounts for 55.8% the total AUM. The reason being that liquid fund investments are a part of treasury management and most of the large corporate treasuries and bank and institutional treasuries are based out of Mumbai. This gives them an obvious advantage in AUM. However, other industrialized and business friendly states like New Delhi, Karnataka, Gujarat, and Tamil Nadu are also gathering steam.
How Indian states stacked up on Debt Fund AUM?
Here are the 10 Indian states in terms of the AUM of longer period debt / income funds with a predominantly corporate and HNI customer base.
Name of the State / | Total Debt Fund AUM |
| Maharashtra | 2,78,904 |
| New Delhi | 79,982 |
| Haryana | 74,235 |
| Karnataka | 65,000 |
| Gujarat | 60,269 |
| West Bengal | 46,098 |
| Tamil Nadu | 38,051 |
| Uttar Pradesh | 29,644 |
| Others | 21,183 |
| Telangana | 11,792 |
| Total Debt Fund AUM (Feb-23) | 7,81,863 |
Data Source: AMFI
Unlike other categories, the share of Maharashtra in overall debt funds is just about 35.7%, despite the strong presence of HNIs, institutions and corporates. You find a strong leadership in debt fund AUM coming from New Delhi, Haryana, and Karnataka. Of course, Haryana can be attributed to the presence of Gurugram, which is one of the major contributors to mutual fund AUM in India from retail and from corporates.
How Indian states stacked up on Growth (equity) Fund AUM?
The table captures the top 10 states in India in terms of total growth (equity) fund AUM across all fund categories, including the equity component of balanced schemes.
Name of the State / | Total Growth Fund AUM |
| Maharashtra | 5,42,053 |
| Gujarat | 1,55,266 |
| New Delhi | 1,47,052 |
| Karnataka | 1,46,165 |
| Uttar Pradesh | 1,19,351 |
| West Bengal | 1,11,796 |
| Others | 99,080 |
| Tamil Nadu | 90,448 |
| Haryana | 60,846 |
| Rajasthan | 48,198 |
| Total Growth Fund AUM (Feb-23) | 18,47,061 |
Data Source: AMFI
This table shows you eloquently how the equity cult has spread across more states in India. Maharashtra has just about 29.3% of the growth / equity fund AUM; much lower than the average for debt funds or even for overall AUM. Not surprisingly, Gujarat emerges at second place, a clear indication that when it comes to investment, people of Gujarat still prefer active equity investing (either directly or indirectly). What is also interesting is that apart from Maharashtra, there are 5 more states with equity fund AUM of over Rs1 trillion.
How Indian states stacked up on Index ETF AUM?
The table captures the ranking of the top 10 states in India in terms of passive or index ETF based mutual fund AUM. Of course, these include equity and debt indices.
Name of the State / | Total Index ETF AUM |
| Maharashtra | 4,18,422 |
| New Delhi | 35,018 |
| West Bengal | 7,548 |
| Others | 6,676 |
| Karnataka | 4,851 |
| Gujarat | 4,288 |
| Tamil Nadu | 3,116 |
| Haryana | 2,721 |
| Uttar Pradesh | 1,928 |
| Jharkhand | 1,534 |
| Total Index ETF AUM (Feb-23) | 491,600 |
Data Source: AMFI
With a total AUM of Rs4.91 trillion, index ETFs are the single largest category of mutual funds in terms of AUM. One argument is that there are no restrictions on an AMC for launching any number of index funds, but that is not the full story. In reality, India like the rest of the world, is also seeing a gradual shift from active investing to passive investing. As market efficiencies make it harder to get alpha, index funds are only likely to pick up. Maharashtra accounts for a whopping 85.1% of the AUM of index ETFs in India, but that is largely due to the strong presence of institutions, corporates and HNIs in this space. Also, it is still to take off and the education is still limited in this area. For now, Gujarat is still showing a preference for active investing over passive investing.
How Indian states stacked up on Gold ETF AUM?
The table captures the top 10 states in India in terms of gold ETF AUM where the AUM growth has not kept pace with the growth in folios.
Name of the State / | Total Gold ETF AUM |
| Maharashtra | 17,463 |
| Karnataka | 858 |
| Tamil Nadu | 627 |
| Others | 578 |
| New Delhi | 397 |
| Gujarat | 299 |
| Telangana | 236 |
| West Bengal | 232 |
| Uttar Pradesh | 207 |
| Goa | 118 |
| Total Gold ETF AUM (Feb-23) | 21,714 |
Data Source: AMFI
At $21.7 billion, one can argue that the AUM is too small to really matter, but this is a good test of the appetite of non-physical gold in India. While Maharashtra dominates, it appears that Southern states like Karnataka and Tamil Nadu are more open to the concept of non-physical gold while in most of the other places, it is still physical gold that is the first port of call. The reach of gold ETFs needs to improve to give us more conclusive evidence.
Last word: what are the major takeaways
Mumbai and Maharashtra are clearly in the lead when it comes to mutual fund AUM, but the good news is that the equity cult has spread rapidly to a number of other states. The combination of mobile trading and user friendly apps has made equities a lot more accessible, as have easier KYC requirements. Above all, the rise of the millennials has also made mutual funds a preferred access point to financial markets. Things should get much better for the smaller states in the months to come.
June saw Rs32722 crore net outflow from debt mutual funds
- India Infoline News Service
- 12 Jul , 2022
- 2:41 PM
In June, mutual funds that specialize in investing in fixed-income securities saw a significant outflow of Rs92,248 crore due to the macroeconomic environment's uncertainty, which was fuelled by predictions surrounding an escalating rate cycle, rising commodity prices, and a slowdown in GDP.
The Association of Mutual Funds in India (Amfi) data available at the time revealed a net outflow of Rs32,722 crore in May and an inflow of Rs54,756 crore in April.
In the month under review, 14 of the 16 fixed-income or debt fund categories had net outflows. categories like overnight, liquid, and ultrashort-term duration funds had significant withdrawals. The 10-year gilt funds and long-duration funds were the only categories to see inflows.
By the end of June, the asset base of debt mutual funds had decreased from Rs13.22 lakh crore at the end of May to Rs12.35 lakh crore. A sizeable chunk of the total assets (about 50%) within the debt fund category is made up of the liquid, ultrashort-term, money market, and overnight fund categories.
Given their substantial contribution, even a little adjustment in the percentage quantity of flows can have a big impact on the total flows within the category. Because of how much institutional money flows into them, the categories of liquid and overnight also stand out.
The categories of overnight funds, liquid funds, and ultrashort-term duration funds accounted for the majority of the outflows during the month of June, with respective outflow statistics of Rs20,668 crore, Rs15,783 crore, and Rs10,058 crore.
Debt funds are typically thought to be less dangerous, and investors find comfort in the fact that they may manage their risks by investing their hard-earned money in things that offer higher returns than bank fixed deposits.
In contrast, equities mutual funds brought in a net amount of Rs15,498 crore in June despite increased market volatility and persistent selling by foreign portfolio investors (FPIs).
In order to attain long-term financial goals, investors are increasingly choosing equities because it is recognized as a value-creating asset class. This increased knowledge among investors is fuelling the development of investments in equity-oriented schemes.
Compared to a net pull-out of Rs7,532 crore in May, the mutual fund sector overall saw a net outflow of Rs69,853 crore last month.
The Association of Mutual Funds in India (Amfi) data available at the time revealed a net outflow of Rs32,722 crore in May and an inflow of Rs54,756 crore in April.
In the month under review, 14 of the 16 fixed-income or debt fund categories had net outflows. categories like overnight, liquid, and ultrashort-term duration funds had significant withdrawals. The 10-year gilt funds and long-duration funds were the only categories to see inflows.
By the end of June, the asset base of debt mutual funds had decreased from Rs13.22 lakh crore at the end of May to Rs12.35 lakh crore. A sizeable chunk of the total assets (about 50%) within the debt fund category is made up of the liquid, ultrashort-term, money market, and overnight fund categories.
Given their substantial contribution, even a little adjustment in the percentage quantity of flows can have a big impact on the total flows within the category. Because of how much institutional money flows into them, the categories of liquid and overnight also stand out.
The categories of overnight funds, liquid funds, and ultrashort-term duration funds accounted for the majority of the outflows during the month of June, with respective outflow statistics of Rs20,668 crore, Rs15,783 crore, and Rs10,058 crore.
Debt funds are typically thought to be less dangerous, and investors find comfort in the fact that they may manage their risks by investing their hard-earned money in things that offer higher returns than bank fixed deposits.
In contrast, equities mutual funds brought in a net amount of Rs15,498 crore in June despite increased market volatility and persistent selling by foreign portfolio investors (FPIs).
In order to attain long-term financial goals, investors are increasingly choosing equities because it is recognized as a value-creating asset class. This increased knowledge among investors is fuelling the development of investments in equity-oriented schemes.
Compared to a net pull-out of Rs7,532 crore in May, the mutual fund sector overall saw a net outflow of Rs69,853 crore last month.
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- 16 March, 2023 |
- 3:52 PM
Here is the state-wise mutual fund AUM story.
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