The Hindu Business Line : MFs see highest inflows since crash

Mumbai, Feb. 3 The asset base of the mutual fund industry rose 9.4 per cent in January, recording the highest growth since the start of the market fall 12 months ago.

The inflows are mainly happening in the fixed income schemes due to large surpluses in the banking sector, coupled with a softened interest rate scenario, said Mr Sandesh Kirkire, Chief Executive Officer, Kotak Mahindra Asset Management.

The average assets under management rose by four per cent in December.

The asset base as of January end stands at Rs 4,60,949 crore, against Rs 4,21,116 crore in December, according to data released by Association of Mutual Funds in India (AMFI).

The uptrend in mutual fund inflows was led by investments in debt schemes, said Mr A.P. Kurian, Chairman, AMFI. “Debt schemes are becoming more attractive, as the equities market is in a continued state of depression.”

Of the 37 fund houses, 13 have reported a decline in asset base while 22 have reported a rise in AUMs.

The top mutual fund house by asset size, Reliance Mutual Fund reported an increase in asset base of more than eight per cent. The second largest – HDFC Mutual Fund – logged an almost 10 per cent rise, maintaining its second position. Last month saw ICICI Prudential MF replacing UTI MF in the third position in terms of asset size.

ICICI Prudential’s asset base has gone up by more than 13 per cent and stands at Rs 47,515 crore, while UTI, which managed to log gains of over eight per cent, now manages close to Rs 46,161 crore of assets.

While there were some fund houses such as LIC MF (30 per cent growth) and IDFC MF (28 per cent) that registered substantial increases in AUMs, a few reported steep dips in AUMs. These include Edelweiss Mutual Fund, which reported an AUM fall of more than 58 per cent; Benchmark Mutual Fund (16 per cent fall); and Mirae Asset Management (14 per cent fall).

While there is a lot of liquidity in the system, it is largely flowing into the debt side. It is a slow trickle when it comes to the equity schemes, said Mr Satish Ramanathan, Head of Equities, Sundaram BNP Paribas Mutual.

There is ample liquidity in the system and this is flowing into the fixed income products mostly liquid schemes, said Mr Parijat Agrawal, Head of Fixed Income, SBI Mutual Fund.

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Pressure easing on mutual funds, with inflows in Nov

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