The asset base of mutual funds surged to a record high of ₹15-lakh crore at the end of July, primarily on account of sharp inflows into liquid, income and equity funds.

The assets under management (AUM) of MFs increased 9.9 per cent in July to a record ₹15.18-lakh crore, said a Crisil compilation of data from the Association of Mutual Funds in India. This marks an absolute growth of ₹1.37-lakh crore in July.

Equity, balance funds soar

Investors continued to show interest in equity funds as indicated by consistent inflows over the past 27 months, except for a small outflow in March 2016, said Crisil. The category attracted inflows worth ₹2,506 crore in July.

Inflows clubbed with mark-to-market gains pushed up category assets by 5.2 per cent or ₹22,321 crore to close at a new high of ₹4.51 lakh crore, found the Crisil study. The Nifty 50 index gained 4.2 per cent in July.

The asset base of balanced funds, which posted inflows for the 26th straight month, rose 8.7 per cent or ₹4,002 crore to ₹49,994 crore — a record high. The category, represented by the Crisil Balanced Fund — Aggressive Index, rose 3.6 per cent in July.

Party for liquid funds too

Thanks to cyclical inflows, the AUM of liquid funds rose 23.3 per cent to ₹3.01-lakh crore. Historical trends show that quarter-end outflows (June) in the category are reversed in the subsequent month (July) as banks and corporates re-invest surplus funds, Crisil said. Similarly, debt funds’ too saw an increase of 8.5 per cent (or ₹52,630 crore), lifting the AUM to a new high of ₹6.70-lakh crore. According to the Crisil study, this is the largest inflow in over six years.

Gold ETFs: fail to glitter

However, assets of gold exchange traded funds (ETFs) fell 2.2 per cent to ₹6,499 crore despite a rise in underlying assets as investors continued to book profit. Gold ETFs have been witnessing consistent outflows since June 2013 owing to fading investor interest.