Mumbai: The Securities and Exchange Board of India's stricter regulation of the debt funds and the quarter end redemptions in June led to huge outflows of over Rs 1.71 lakh crore from income and debt oriented schemes of the mutual fund industry last month.
On a net basis, the outflow from the schemes was Rs 1.60 lakh crore against a net inflow of Rs 76,989 crore in May.
The massive outflows pulled down the industry's asset under management (AUM) to Rs 24.25 lakh crore in end-June from Rs 25.93 lakh crore in May, according to data released by the Association of Mutual Funds in India (Amfi).
In June the Sebi had announced that a graded exit load to be levied on investors who exit liquid schemes up to a period of 7 days and also mandated liquid mutual fund schemes to hold at least 20 per cent asset in liquid assets such as cash, government securities, T-bills and Repo on government securities.
Liquid funds saw the biggest outflow of Rs 1,52,431.65 crore among the various debt fund categories. The second biggest outflow among the debt category was from low duration fund of Rs 4,689.22 crore.
N S Venkatesh, Chief Executive, Amfi, in a statement, said, "This is a usual quarter-end phenomena where the industry does witness temporary redemptions from liquid funds."
However, the silver lining was inflow into equity mutual funds improving for the third month in a row to Rs 7,663.14 crore in June-significantly up from Rs 4,608.74 crore in April --- largely driven by multi-cap and large-cap fund categories.
Equity exchange traded funds (ETFs) also saw a jump in inflows to Rs 5,382.70 crore.
Systematic investment plans' contribution stood at Rs 8,122.13 crore, coming from 2.73 crore SIP accounts.
"Political stability, lower inflation coupled with the Reserve Bank's stance to lower interest rates is driving the enhanced retail inflows towards equity-oriented schemes," Venkatesh said.
During June, the flows into gilt schemes (Rs 196.76 crore) and banking & PSU fund (Rs 799.39 crore) schemes stood positive, owing to the dovish stance of the RBI on interest rates.