The Financial Year 2021 ended on a better note than expected for the Mutual Fund Industry with an increase in average AUM of 30.20% on a year-on-year basis!
Redemptions were made by corporates and banks in March 2021 leading to a reduction in average AUM of Mutual Fund industry by 0.4% for the month. Apart from payments of advance tax, March is an end of the financial year when institutions tend to book profits to show it on their balance sheets. Earlier credit risk funds were considered as an investment option to get that extra return. This avenue dampened due to the crisis in the economy, decrease in credit ratings and fear of defaults. A lot of money from that segment shifted to schemes like corporate bond funds. Floating rate funds also saw huge inflows as markets feared reversal of interest rates and since these schemes invest in instruments linked to interest rate movement appeared lucrative.
Equity oriented schemes however showed positive inflows of around 9K crores after net outflows for straight eight months. In spite of net out flow of 25245.95 crores from equity-oriented schemes due to the pandemic, job losses and salary cuts an overall growth of 51.13% was witnessed in FY 2021 due to increase in market capitalisation and fresh inflows majorly from retail investors and FIIs.
For a detailed analysis please refer to our complete report below: