InvestorQ : How will the sharp fall in the markets impact the AUMs of equity mutual funds? Do you see panic selling by investors in equity funds?
Deepa Salunkhe made post

How will the sharp fall in the markets impact the AUMs of equity mutual funds? Do you see panic selling by investors in equity funds?

Answer
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Juvina Maggie answered.
5 months ago


There are two implications this could have for mutual fund investors. While mutual funds in India have continued to see net inflows in the month of March, there has been a sharp fall in AUMs of equity funds due to the correction in the markets. This has driven equity fund AUMs lower by 28% from Rs.7,90,000 crore in January to Rs.5,80,000 crore in March. The challenge is that when fund AUM comes down from a higher slab to a lower slab, the TER (total expense ratio) is charged at a higher rate. That means; investors will end up paying a higher cost on equity funds, further denting returns. While there may not be any panic selling as most of the inflows come from SIPs, investors are likely to become a little more demanding of fund managers.