With the stock markets turning volatile, gilt and income schemes of mutual funds got worst hit in the month of May. According to data provided by Association of Mutual Funds in India (AMFI) domestic mutual funds registered outflows of Rs 50,000 crore at the end of May, primarily in liquid and income schemes. Compared to this, Rs 1.4 lakh crore inflows were registered in the month of April.

The asset under management (AUM) of the industry also dipped by Rs 66,000 crore to Rs 22.6 lakh crore as on May 31. Equity funds, however, maintained the steady flow of investments and registered net inflow of Rs 10,444 crore during the same month.  Net inflows for the year to date, however, reduced to Rs 87,428 crore from Rs 1,09,992 crore in the previous year.

Category-Wise SchemesNet Inflow / (Outflow)
For the Month
Net Inflow / (Outflow)
For the Year to Date
Current Year
Net Inflow / (Outflow)
For the Year to Date
Previous Year
Income                   (153)          (15,187)                                39,771
Infrastructure Debt Fund              (21,168)                153                                    200
Equity Schemes (Excluding Arbitrage Funds)                (1,958)           21,168                                14,044
Arbitrage Funds                (6,166)             1,958                                 5,006
Balanced              (69,762)             6,166                                14,799
Liquid/ Money Market                    864           69,762                                34,711
Gilt                (1,353)               (864)                                   (487)
ELSS – Equity                      92             1,353                                 1,118
Gold ETF                (2,999)                (92)                                   (137)
Other ETFs                     (12)             2,999                                 1,040
Fund of Funds Investing Overseas              (87,428)                  12                                     (73)
TOTAL           (1,90,043)           87,428                             1,09,992

Liquid funds are used by companies to park their excess cash for meeting day to day transactions. In the month of May it registered an outflow of Rs 46,724 crore. Income funds posted an outflow of Rs 20,407 crore, and is mainly used by companies and retail investors. Liquid funds invest your money in papers with high liquidity such as treasury bills, certificates of deposit and commercial paper. Income funds, on the other hand, invest in government securities.

Over the last few years investment in mutual funds has increased manifold on the back of rising stock markets. At the time when other asset classes such as real estate and gold have given the diminishing return, equity mutual funds have given high returns attracting retail investors like never before.