After 6 soaring years, Mutual Funds AUM sees sharp fall; Check massive impact and outlook

Mutual Funds AUM: The Mutual Fund Industry in India is going through a tough time. There has been a drop in their Assets Under Management (AUM) for some time now. So, what will be the impact on this industry as a result of Coronavirus Pandemic? Will it see more outflows? Zee Business' Mansi Dave's exclusive research gives investors some insight into this.

Notably, mutual fund industry has been under some stress since the beginning of January 2020. However, over the last 6 years i.e. from 2014 onward, the industry had seen a good growth of 23 per cent.

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6 साल बाद म्यूचुअल फंड AUM में सबसे बड़ी गिरावट, किन फंड्स पर सबसे ज्यादा असर? जानें यहां#MutualFund @AnilSinghvi_ @davemansi145 pic.twitter.com/VfCQ6Xn0ce

— Zee Business (@ZeeBusiness) April 7, 2020

Mansi Dave says that the recent market upheavals and the impact of coronavirus pandemic has now started affecting this sector. If the situation remains like this, the sector could see a further downward trend till December this year, she says.

MF Segments That Suffered The Most
If one looks into the schemes and the trends, it appears that the open ended schemes have seen a fall of 44% in the last three months i.e. between January and March. In January, AUM for open ended schemes were worth Rs 7.74 lakh cr which have now gone down to Rs 5.37 lakh cr. Meanwhile, the closed ended schemes have fallen by 43%. The AUM for these schemes were worth Rs 33945 cr at the beginning of January which came down to Rs 23679 cr by March.

For equity, schemes the fall has been even steeper at 61%. From Rs 9.6 lakh cr in January it came down to Rs 5.6 lakh cr.

As far as the portfolios in open ended schemes are concerned, maximum fall of 54% has been witnessed in value-based portfolios. In Contra and Small caps portfolios, fall has been 48% and 49% respectively. In large cap, large & mid cap and multi cap the fall is 47%, 42% and 42% respectively.

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The impact due to coronavirus disease is not just seen in the equity funds but also in the rest of the mutual fund universe, she concludes.