CRISIL Research is out with a new report analyzing the Mutual fund industry in current market condition. The highlights of the reports are:
- The Indian mutual fund industry's month-end assets rose by around 8% or Rs 47,700 cr to Rs 6.59 lakh cr in January 2012 primarily due to inflows in money market funds and mark-to-market gains in equity funds.
- Money market funds witnessed the highest inflows by any category in the month of Rs 26,400 cr as corporates reinvested their surplus funds that were withdrawn to pay advance tax in December taking the month-end assets of the category to Rs 1.48 lakh cr.
- This is a cyclical affair wherein corporates withdraw during a quarter-end (December) and reverse these outflows in the subsequent month (January).
- The push for mutual fund assets growth also came from equity funds , which surged by Rs 18,400 cr or 11% to Rs 1.80 lakh cr on mark-to-market gains in the equity market, which rose by 12% (S&P CNX Nifty) in January.
- Gilt funds recorded their highest inflows since September 2010 of Rs 521 cr in January, and the second consecutive month of inflows as sentiments for these funds have risen on views of peaking of interest rates and easing of monetary policy going forward
- Among major losers, income funds (including Ultra short-term debt funds ) saw outflows of Rs 2,900 cr in January, the third consecutive month of outflows for the category.
- In the secondary equity market, Mutual funds sold equities worth Rs 1,900 cr in January against buying of Rs 580 cr in December while on the debt front, they were net buyers to the tune of Rs 13,242 cr in January compared to net buying of Rs 50,979 cr in the previous month.
- Among major regulatory developments, SEBI decided to have mark-to-market valuation in debt schemes of mutual funds where the balance period is 60 days or more as compared to the earlier requirement of valuation for 91 days and beyond.
- SEBI also decided to liberalise the advertisement code for asset management companies.
- SEBI planned to allow mutual funds and insurance firms to subscribe to preferential issues of companies even if they have traded the shares of the issuing corporates in the past six months, to boost liquidity in the market and make it easier for firms to raise funds.
- Mutual fund houses adopted a common know-your-customer application form from January 1, 2012.
The report also contains analysis on the fund ‘ ICICI Prudential Focused Bluechip Equity Fund
’ and Long term debt fund category. To view the full report, please click on the below attachment