MF industry AUM rises after 18% fall in March

New Delhi: The opening of the economy post lockdown and gradual pick up in business activity has positively impacted the country's mutual fund industry.

According to Indian Mutual Fund Tracker-July 2020 by Motilal Oswal Institutional Equities, after plunging 18 per cent from Rs 27.2 lakh crore in February to Rs 22.3 lakh crore in March, total (asset under management) AUM of domestic MFs have climbed back to Rs 27.1 lakh crore in July, 2020.

The reversal of fortune for the MF industry was primarily led by equity, liquid, income, and other ETF funds. Equity AUM (including ELSS and Index funds) of domestic mutual funds increased 5 per cent MoM to Rs 7.8 lakh crore in July, led by a rise in market indices and a marginal increase in sales of equity schemes.

At the same time, redemptions increased 32.5 per cent MoM to Rs 18,800 crore, leading to net outflows to Rs 4,000 crore in July, the first in 52 months.

The Nifty has maintained its upward momentum and closed higher for the second consecutive month in July(up 7.5 per cent MoM). Expectation of gradual demand recovery coupled with benign global backdrop aided the Nifty's north-bound journey.