Fixed Maturity Plans witnessed outflow for the second straight month in May as investors pulled out Rs 1,797 crore from the schemes, amid many non-banking finance companies grappling with debt woes. However, latest data from industry body Amfi Monday showed that average Assets Under Management (AUM) of mutual funds rose to Rs 25.43 lakh crore in May from Rs 25.27 lakh crore in the previous month on the back of increased inflows into equity-linked schemes. In May, retail investment through Systematic Investment Plans (SIPs) declined to Rs 8,183 crore from Rs 8,238 crore in April.
FMPs, which invest in debt instruments like corporate bonds, recorded an outflow of Rs 1,797 crore last month. In April, the outflow stood at a whopping Rs 17,644 crore. In recent months, the mutual fund industry has been grappling with redemption pressures in the wake of debt crisis at various groups, including IL&FS, Essel and DHFL. Data from the Association of Mutual Funds of India (Amfi) showed that overall net outflow in close ended debt oriented schemes stood at Rs 2,001 crore in May. “Investor confidence in FMPs is at an all-time low.
The investment has fallen by Rs 2,000 crore in this category. The recent IL&FS fiasco followed by the DHFL fiasco mostly affected FMPs in the debt fund category leading to many schemes being down by more than 10 per cent - which is extremely poor for a debt fund (considered low risk),” said investment platform Groww.In COO Harsh Jain.