The Indian mutual fund industry’s assets increased to Rs 6.59 trillion in January,registering an increase of Rs 477 billion on a month-on-month basis.
According to Crisil Research,the 8 per cent rise last month over December was on higher inflows in money market funds and mark-to- market gains in equity funds.
Money market funds witnessed inflows of Rs 264 billion in January,taking the total assets under this category to Rs 1.48 trillion compared with Rs 1.21 trillion in December.
Meanwhile,as a result of the uptick in the equity market,assets under equity funds surged by Rs 184 billion or 11 per cent to Rs 1.80 trillion.
The equity market represented by the benchmark S&P CNX Nifty rose around 12 per cent in January spurred by positive global and domestic cues,the first monthly gain for the market since October 2011.
Gilt funds recorded highest inflows since September 2010 of over Rs 5.21 billion in January,the second consecutive month of inflows.
“Sentiments for gilt funds have risen on views of peaking of interest rates and easing of monetary policy going forward.
This is expected to benefit long-term debt funds including gilt funds,” the report said.
Meanwhile,Income funds (including ultra short-term debt funds) saw outflows of Rs 29 billion in January,the third consecutive month of outflows,primarily because,investors preferred “long-term debt avenues on views of peaking of interest rates in the domestic economy” the report said.
Fixed Maturity Plans (FMPs) continued to garner majority of the new fund offers (NFOs) during the month.
In January,49 FMPs were launched garnering Rs 78.44 billion compared with three other NFOs launched,which in total garnered only Rs 6.57 billion.
An analysis of month-on-month mutual fund flows and AUM distribution,shows that Money Market Funds,Gilt Funds and Gold ETF funds were the three categories which witnessed a net inflow of Rs 264.29 billion,Rs 5.21 billion and Rs 0.82 billion respectively.
In January,income funds witnessed a net outflow of Rs 29.26 billion,followed by equity funds which saw outflow of Rs 3.80 billion and,balanced funds – Rs 1.01 billion,Crisil said.