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The mutual fund industry posted a near three per cent growth in its average assets under management (AUM) to close marginally below the Rs 7,00,000 crore mark in May.
This has been on the back of higher inflows into money market/ liquid funds, equity and income funds, a CRISIL research report has said.
The AUM rose to Rs 6,99,000 crore in May gaining around three per cent or Rs 19,100 crore, the report said.
The mutual fund industry posted a nearly 16 per cent growth in its AUM at Rs 6,80,000 crore in April.
Equity funds had witnessed net inflows but assets declined during May. Equity funds witnessed a net inflow of Rs 400 crore in the month but assets declined on mark-to-market losses.
Month-end assets of equity funds declined by over five per cent (Rs 9,200 crore) to Rs 1,70,000 crore at the end of May.
This was because the underlying equity markets represented by the benchmark S&P CNX Nifty fell by over six per cent in May, dragged down by weak global and domestic cues.
CRISIL said the money market/ liquid funds saw net inflow of Rs 25,000 crore, garnering around 94 per cent of the total inflow (of Rs 26,700 crore) seen by the industry in the month. However, the inflows were sharply lower compared to Rs 75,800 crore seen by the industry in April.
The assets of this category were up by 16 per cent to Rs 1,83,000 crore as of May, the highest since May 2011.
FMPs rise
The average returns of the category were 0.80 per cent as of May compared to 0.85 per cent in the previous month.
Crisil report said the income funds witnessed inflows and share of FMPs (fixed maturity plans) too rose.
Income funds (including ultra short-term debt funds and fixed maturity plans or FMPs) continued to see inflows for the second month in a row.
The category logged inflows of around Rs 1,600 crore in May, sharply lower than Rs 17,900 crore seen in April.
The category AUM rose by Rs 3,700 crore to Rs 3,13,000 crore in the month which included Rs 1,34,000 crore AUM under FMPs.
The rising interest rates in the economy over the past two years have seen the share of FMPs in the category grow to 43 per cent in May 2012 from eight per cent in May 2010.
The current inflows in this category too are largely on account of FMP NFOs where investors are able to lock into higher yields, Crisil said.
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