After a blistering start to the current financial year,the mutual fund industry has returned to normalcy in May in terms of the total inflows. The industry recorded a total inflow of Rs 30,148 crore in May this year down 80 per cent from the inflows recorded in April 2009. During April,Rs 1,54,192 crore found its way into the industry,recording the highest inflow in the last four years. The industry had recorded a net inflow of Rs 6,190 crore in May 2008. Income funds (funds that invest in debt instruments) were flush with cash as this category received a total inflow of Rs 28,114 crore in May. However,this is substantial compared with April when these funds had a net inflow of Rs 1,03,055 crore. Liquid/money market funds,which raked in the highest inflow at Rs 51,852 crore in April,managed to collect just Rs 856 crore in May. The large amount of money that was withdrawn in March due to advance tax payments found its way back in April. However,in May it was business as usual, said A P Kurian,chairman,Association of Mutual Funds in India (AMFI). May was also good for equity funds. After witnessing an outflow of Rs 196 crore in April,this category mopped up Rs 1,903 crore on the back of reviving markets. In May,we witnessed a surge in equity investments. The equity portfolio was up by 28.26 per cent last month. The recent upswing in the markets has led to a lot of investments through the lump sum and systematic investment mode, said Jaideep Bhattacharya,chief marketing officer,UTI Mutual Fund. Of the nine fund categories,only three balanced funds,gilt and funds of funds investing overseas witnessed outflow. Gilt funds recorded the highest outflow of funds at Rs 792 crore,followed by fund of funds at Rs 127 crore and balanced funds at Rs 43 crore. Last month,there was a lot of liquidity in the banking sector. The call rates were between 3 and 3.5 per cent. Therefore,banks parked their money in mutual funds where they got returns of more than 5 per cent, said Bhattacharya.
