The mutual fund industry saw its asset base grow by 8.3 per cent in October, led by inflows from the corporate sector. At the end of October 2011, the industry's total assets under management stood at Rs 6.95 lakh crore against Rs. 6.41 lakh crore at the end of September.

The start of every quarter sees inflows into the industry as money that moves out as advance tax payments finds its way back into the system. Liquid/money market funds get a bulk of this investment. The total AUM under liquid/money market funds increased from Rs 1.28 lakh crore to Rs 1.62 lakh crore in October, an increase of 26.46 per cent.

Gold ETFs were the next big gainers in October with the total AUM moving from Rs 8,173 crore to Rs 9,090 crore. IDBI gold ETF, the 12th ETF to be launched in the industry, received Rs 110 crore in collections from its new fund offer. The fund was open from October 19 to November 2. The units were allotted on November 9.

The increase in AUM is as much a function of the increasing value of gold as of the number of SIPs in gold funds, say analysts. Gold fund of funds have garnered a good response from investors.

Equity schemes have increased in AUM by 4.3 per cent from Rs 1.54 lakh crore in September to Rs 1.61 lakh crore in October. However, fund house officials believe that it is not a very significant increase. “Retail investors are looking at value at this point. They should look at entering the market incrementally at current values,” said Mr Deepak Chatterjee, Managing Director, SBI Mutual Fund.

The industry AUM has fallen by 11.5 per cent so far this fiscal. “A large amount of money has gone out of the system from the debt category because of the RBI guidelines asking banks to reduce exposure. Also, equity market valuations have come down to a great extent which is having a negative impact on equity portfolios,” said Mr Jaideep Bhattacharya, Chief Marketing Officer, UTI Mutual Fund.

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