Mutual Fund assets under management rise in Nov
According to CRISIL Research, as per the monthly numbers released by the Association of Mutual Funds in India (AMFI), the Indian mutual fund industry‘s month-end assets under management (AUM) rose 7 percent to a record high of Rs 8,90,000 crore in November.
December 10, 2013 / 14:36 IST
Mutual fund assets under management (AUM) rise for the second month, touching almost Rs 900,000 crore level. The rise in AUM was primarily due to inflows into liquid/money market funds.
According to CRISIL Research, as per the monthly numbers released by the Association of Mutual Funds in India (AMFI), the Indian mutual fund industry’s month-end assets under management (AUM) rose 7 percent to a record high of Rs 8,90,000 crore in November.
Liquid funds saw inflows due to improved liquidity and cyclical inflows. Money market/liquid funds saw net inflows worth Rs 51,400 crore and rise of 30 percent in AUM due to improved liquidity in the system and cyclical inflows. Liquidity in the banking system improved in November due to gilt purchases via open market operations (OMOs) and an additional 11-day repo auction by the Reserve Bank of India (RBI). Government spending also helped ease liquidity in the system. Improvement in liquidity is reflected from two instances - the decrease in banks’ average borrowing via the central bank’s marginal standing facility (MSF) and the decline in the average net borrowing via the RBI’s liquidity adjustment facility (LAF) - the repo and reverse repo. Cyclical inflows in the category in October and November helped; these inflows are a result of companies re-investing their short-term investments in the category before they withdraw in December to meet their advance tax requirements. In October-November, the category saw record inflows of Rs 1,19,000 crore on a consolidated basis.Equity funds’ AUM up for the third consecutive month, rose to Rs 1,75,000 crore marking its third monthly rise in a row. The rise in equity funds’ assets was an outcome of inflows in the category, and rise in the small and mid-cap indices. The category saw inflows of Rs 700 crore in the month (highest in the past five months) compared to outflows of Rs 3500 crore in October.Gilt funds’ AUM rose 7 percent to Rs 8,000 crore on renewed interest on account of inflows on value buying amid resurgent weakness in underlying instrumentsOutflow of Rs 3,300 crore from the income funds category (includes long-term debt funds, short-term debt funds, fixed maturity plans and ultra short-term debt funds) was the biggest drag for the industry assets in terms of flows in November. The category assets fell 0.7 percent in November to Rs 4,30,000 crore approximately. Outflows could be attributed to redemption pressure as investors shunned long-term debt funds due to their underperformance. Gold ETFs’ outflow trend continues for the sixth consecutive month. Investors continued to exit from gold exchange traded funds (ETFs) for the sixth consecutive month amid weakness in the underlying asset class prices. The category’s AUM fell by 6 percent to Rs 9300 crore led by outflows of Rs 130 crore and mark-to-market losses.Fixed maturity plans (FMPs) continued to attract investor attention due to prevalent high yields of debt instruments in the financial market. Out of the 60 new fund offers (NFOs) from mutual funds during the month, FMPs accounted for as many as 54 new fund launches, higher than 48 launches in the previous month. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
