The country’s mutual fund industry posted five per cent growth in average assets under management (AUM) to touch all-time high of Rs 8.68 lakh crore in May on the back of strong inflows into money market and income funds, a Crisil Research report has said.

The country’s 44 fund houses together had an average AUM of Rs 8.68 lakh crore in May, significantly higher than the previous record of Rs 8.26 lakh crore in January 2013.

According to the report, the AUM gains were led by inflows into income and liquid funds.

“The mutual fund industry’s month-end AUM rose over 5 per cent month on month or Rs 42,900 crore to all-time high of Rs 8.68 lakh crore in May,” Crisil said.

The income funds’ assets rose by 6% to a three-year high of Rs 4.47 lakh crore.

“Most of the inflows were into short term and ultra short term debt funds as banks and corporates re-invested their funds in these short maturity categories,” the report said.

Similarly, assets of liquid funds or money market funds jumped to a 25-month high of Rs 2.06 lakh crore because of improved liquidity in the banking system.

However, the mutual fund industry saw an outflow of nearly Rs 500 crore in the gilt funds segment in May after seeing an inflow in the preceding month. This was the highest pull out since July 2009, when Rs 1,061 crore of outflows witnessed in the gilt funds category.

Accordingly, gilt funds’ assets declined by Rs 255 crore to Rs 8,900 crore at the end of May.

In addition, equity funds saw outflow of Rs 3400 crore in May, a sharp hike from Rs 300 crore withdrawn in April, the highest for the category in eight months.

The segment has witnessed outflows in 11 months out of the past 12 months as investors continued to book profits.

The outflow from the equity market is coincided with around 1 per cent gain in the National Stock Exchange’ benchmark Nifty amid mixed domestic and global cues.

Besides, equity funds’ assets declined by Rs 3200 crore, or 1.8 per cent, in May to Rs 1.75 lakh crore.

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