AUM rises for 2nd consecutive month in May: CRISIL

The AUM rise was mainly due to inflows into money market/liquid funds; equity and income funds too witnessed inflows

June 14, 2012 10:45 IST | India Infoline News Service
According to a CRISIL Research report, the mutual fund industry’s month-end assets under management (AUM) rose for the second consecutive month to close marginally below the Rs. 7 trillion mark (Rs. 6.99 trillion) in May, gaining around 3% (Rs. 191 billion).
The report, issued on 8th June, said, “The AUM rise was mainly due to inflows into money market/liquid funds; equity and income funds too witnessed inflows.”
Equity funds witnessed a net inflow of Rs. 4 billion in May 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 as 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.
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 May. 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.
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 May 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.

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