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Starting off the New Year on a bullish note, the mutual fund industry’s overall asset base grew by a whopping Rs 66,000 crore to touch Rs 8.26 lakh crore in January.
The robust growth primarily came on the back of strong inflows in categories such as money market, income and gilt funds, amid the government making efforts to attract more investors into the domestic mutual fund industry.
Total Assets Under Management (AUM) rose by Rs 66,000 crore or an increase of nine per cent in January, compared to Rs 7.59 lakh crore in December 2012.
AUM stood at Rs 8.26 lakh crore at the end of January, according to latest data available with the Association of Mutual Funds in India (AMFI).
The mutual funds collect money from investors and later invest the same into various market segments including stocks, IPOs (primary market) and bonds.
A total inflow of Rs 60,732 crore was witnessed in January 2013, the highest since April 2012. However, the mutual fund industry saw outflows of Rs 40,900 crore in December.
Industry expects net inflow into mutual funds to further pick-up in the coming months as the government and SEBI have expressed their intention to revive equity culture in the country and help channelise the household income into stocks, mutual funds and insurance sectors.
Inflows in money market and income funds that invest only in debt instruments issued by government, public or private companies, have contributed most to the industry’s rising AUM.
With inflows of Rs 44,865 crore, money market funds’ AUM surged to Rs 1.95 lakh crore. A similar trend was seen in income funds, with inflows of Rs 17,281 crore taking the assets managed by the fund near Rs 4 lakh crore, the highest month-end assets for the category in the past 32 months.
Mutual funds have also shown interest for gilt funds as the fund has seen net inflows of Rs 1,145 crore. On the other hand, equity funds continued to register outflows for the eighth consecutive month in January. The mutual fund investors sold equities worth Rs 2,501 crore in the month of January, taking the asset base for the portfolio to Rs 1.65 lakh crore.
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