Mumbai: The mutual fund industry posted a nearly 3% growth in its average assets under management (AUM) to close marginally below the Rs 7 trillion mark in May. This has been on the back of higher inflows into money market/ liquid funds, equity and income funds, a Crisil research report has said.The AUM rose to Rs 6.99 trillion in May gaining around 3% or Rs 191 billion, the report said.
The mutual fund industry posted a nearly 16% growth in its average assets under management (AUM) at Rs 6.8 trillion in April. Equity funds had witnessed net inflows but assets declined during May.
Equity funds witnessed a net inflow of Rs 4 billion in the month but assets declined on mark to market losses. Month end assets of equity funds declined by over 5% (Rs 92 billion) to Rs 1.70 trillion at the end of May. This was because the underlying equity markets represented by the benchmark S&P CNX Nifty fell by over 6% in May, dragged down by weak global and domestic cues.
Crisil said the money market /liquid funds saw net inflow of Rs 250 billion, garnering around 94% of the total inflow (of Rs 267 billion) seen by the industry in the month. However, the inflows were sharply lower compared to Rs 758 billion seen by the industry in April 2012.
The assets of this category were up by 16% to Rs 1.83 trillion as of May 2012, the highest since May 2011. The average returns of the category were 0.80% as of May compared to 0.85% in the previous month.
Crisil report said the income funds witnessed inflows and share of FMPs too rose. Income funds (including ultra short-term debt funds and fixed maturity plans or FMPs) continued to see inflows for the second month in a row.
The category logged inflows of around Rs 16 billion in May, sharply lower than Rs 179 billion seen in April. The category AUM rose by Rs 37 billion to Rs 3.13 trillion in the month which included Rs 1.34 trillion AUM under FMPs.
The rising interest rates in the economy over the past two years have seen the share of FMPs in the category grow to 43% in May 2012 from 8% in May 2010. The current inflows in this category too are largely on account of FMP NFOs where investors are able to lock into higher yields, Crisil said.