The Hindu Business Line : `Record' launches by mutual fund industry in 2004-05

THE Indian mutual fund industry has witnessed several records during the fiscal ended March 2005. It was the year in which the largest number of new schemes - 97 in all, were launched. The amount mobilised by the new schemes at over Rs 25,000 crore is also a new record.

The industry mobilised Rs 25,764 crore through 97 new schemes during the fiscal as against Rs 8,549 crore mobilised through 46 new schemes in the previous fiscal.

According to the Chairman of Association of Mutual Funds in India (AMFI), Mr A.P. Kurian, the gross amount garnered during fiscal 2004-05 was as high as about Rs 8.4-lakh crore, a growth of 42 per cent over the previous fiscal.

However, the fiscal also witnessed the most discouraging record with net accretion standing at Rs 2,154 crore, which was the lowest in the last five years.

This, Mr Kurian said, was mainly due to the net outflow of over Rs 14,000 crore from the income funds and Rs 1,345 crore from gilt funds coupled with a substantially lower net inflow of liquid funds at Rs 10,347 crore as against Rs 24,577 crore in the previous fiscal.

According to him, despite 36 new equity schemes mobilising Rs 11,756 crore, 10 times more than that of previous fiscal, the net mobilisation under equity schemes stood at only Rs 7,247 crore, which was again lower than the previous fiscal.

"May be, this is a temporary phenomenon reflecting the market realities and the scenario might change in the years to come," Mr Kurian said in a latest update of AMFI.

Viewing that the situation needs to be analysed and lessons learnt and suitable measures taken, Mr Kurian said the industry has a challenge before it of reaching out to retail investors and to position the mutual fund products as a long-term investment avenue for the household sector.

As at the end of March 2005, the total assets under management stood at Rs 1,49,554 crore as against Rs 1,39,616 crore reported in the previous fiscal, a moderate growth of seven per cent over 2003-04.

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