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Aided by strong inflow into equity and liquid schemes, the assets under management of mutual funds increased three per cent in July to ₹10.06 lakh crore against ₹9.75 lakh crore recorded in June.
The size of the mutual fund industry is close to the record high of ₹10.11 lakh crore logged in May, according to data released by the Association of Mutual Funds in India on Friday.
Liquid funds leadLiquid funds attracted the highest inflow of ₹25,589 crore taking the total assets to ₹2.44 lakh crore.
The fund flow in these schemes is largely cyclical in nature as it witnessed an outflow of ₹67,997 crore in June as large corporate and banks withdrew money to pay advance tax.
Equity MFs hogged the limelight by attracting an inflow of ₹10,845 crore in June.
The AUM under equity funds was up 4 per cent to a record high of ₹2.52 lakh crore compared with ₹2.42 lakh crore in June.
Inflows into equity funds have improved substantially in the last four months with the markets performing better. The benchmark Nifty gained 1.44 per cent in July and 22.48 per cent since January 2014.
Change in tax policySunil Subramaniam, Deputy CEO, Sundaram Mutual Fund, said equity schemes have managed to attract flows from debt funds which have become less attractive after the government extended the period for claiming tax benefit to three years from one year.
“We may continue to witness fund flow in equity-oriented schemes with corporate and high networth investors shifting from debt. If the recent rally in the markets sustain for three-six months we may see some retail participation also,” he added.
The change in taxation policy led to an outflow of ₹10,080 crore in income funds, the highest since December 2012. The close-ended income funds (mostly fixed maturity plans) posted outflows of ₹4,926 crore, the open-ended income funds saw outflows of ₹4,230 crore and the interval funds registered outflows of ₹924 crore in July.
The AUM was down to ₹4.72 lakh crore. Despite the high outflow, a sharp fall in income funds assets under management was averted through gains in underlying assets.
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