Investors pulled out Rs 1.60 lakh crore on a net basis from mutual fund schemes in June against a net investment of Rs 76,989 crore in May mainly due to persisting weak confidence in debt-oriented plans, industry data showed Monday.
Net outflows from debt-oriented schemes were more than Rs 1.71 lakh crore in June against inflows of Rs 70,119 crore in May, the data by Association of Mutual Fund of India (AMFI) showed.
In recent months, the mutual fund industry has been grappling with redemption pressure in the wake of debt crises at various groups, including IL&FS, Essel and DHFL.
"The debt segment saw the largest outflow of Rs 1,71,349 crore as compared to Rs 70,119 crore inflow witnessed in May'19, as investors' confidence was dented after a series of defaults/delays by some popular names," Bajaj Capital CEO Rahul Parikh said.
The net outflows of mutual funds stood at Rs 1,59,814.40 crore in June.
Debt-oriented schemes, which include overnight fund, liquid fund, low duration fund saw a significant outflows with liquid funds being the worst hit.
Liquid funds alone witnessed an outflow of Rs 1.52 lakh crore.
On the liquid fund outflows AMFI CEO NS Venkatesh said, "This is a usual quarter-end phenomena where the industry does witness temporary redemptions from liquid funds."
Despite the outflow, the AUM (Assets Under Management) for June 2019, stood higher at Rs 25.81 lakh crores, as compared to Rs 25.43 lakh crore for May 2019, the AMFI said.
Equity mutual funds, however, witnessed a rise of over 41 per cent in inflows to Rs 7,633 crore in June compared to Rs 5,407 crore seen in the previous month.
"Stellar jump in the inflows into equity schemes over the last two months, especially after the decisive electoral verdict has helped repose retail investor trust.
"Political stability, lower inflation coupled with RBI stance to lower interest rates leading to possible robust growth in the corporate earnings is leading enhanced retail flows towards equity oriented schemes," Mr Venkatesh said.
In the equity segment, multi-cap funds attracted the highest inflows of Rs 1835.45 crore, followed by Rs 1,509.52 crores in the large cap funds and Rs 927 crores in small fund categories.
Investors preferred large-cap and multi-cap funds as investors played safe before the Union Budget, Mr Parikh said.
Fixed Maturity Plans (FMP) continued to see an outflow in June after May and April. In June it registered an outflow of Rs 2,361.3 as compared to Rs 1,797.94 crore in May and the outflows stood at 17,644.42 crore in April.
Contribution to systematic investment plans (SIP) stood at Rs 8,122.13 crore in June coming in from 2.73 crore SIP accounts against Rs 8,183 crore in May.