MF assets at a new high: CRISIL

Investors continued to exit gold ETFs for the eleventh straight month with consolidated outflows amounting to Rs 24 bn till April

May 09, 2014 4:30 IST | India Infoline News Service
Indian mutual fund industry’s assets under management (AUM) rose to a record Rs 9.45 trillion, up 14.6% or Rs 1.20 trillion, according to the monthly numbers released by the Association of Mutual Funds in India (AMFI). The spurt in the AUM – also the largest absolute gain in the last one year – was primarily due to inflows into liquid funds.
Liquid funds see biggest inflows in last three years
Liquid funds, which posted record outflows of Rs 1.17 trillion in the previous month, snapped the trend by attracting inflows of Rs 1.24 trillion -- the biggest in last three years; as corporates and banks/ financial institutions ploughed the surplus money back into the funds that were withdrawn in March (due to advance tax and financial year-end requirement), liquid funds’ assets rose by 94.6% in April to Rs 2.59 trillion.
Income funds register highest outflows since December 2012
Income funds recorded outflows of Rs 99.27 bn, their highest in the last 16 months, mainly due to outflows from closed ended and interval funds. The fall in the category’s AUM was capped at Rs 26.62 bn (down 0.6%) due to mark-to-market gains led by a rise in underlying asset prices during the month. The category assets closed at Rs 4.58 trillion at the end of April compared with Rs 4.61 trillion at the end of March 2014. 
Gilt funds see outflow for fifth consecutive month
Assets of gilt funds declined for the fifth straight month as investors shied away from the category citing uncertainty in the interest rate environment. Rise in March inflation numbers and expectation of further increase due to below-than-normal monsoon forecast has raised concerns that the Reserve Bank of India may not ease its key interest rates soon. Gilt funds’ AUM fell by Rs 2.20 bn or 3.6% to Rs 58.95 bn amid outflows of Rs 3.73 bn during the month.
Gold ETFs saw total outflows of Rs 24 bn in the last 11 months
Investors continued to exit gold exchange traded funds (ETFs) for the eleventh straight month with consolidated outflows amounting to Rs 24 bn till April. For the latest month, assets of Gold ETFs fell by 1.7% to Rs 85.27 bn amid outflows of Rs 1.46 bn in April. Of late, the popularity of the category has waned due to a subdued performance by the underlying assets. 
Equity funds’ AUM gains for the third consecutive month
Assets of equity funds (including ELSS funds) increased for the third month in a row with April witnessing a gain of 0.6% or Rs 11.39 bn to Rs 1.92 trillion. The gains were led primarily by mark to market gains in the broad market; the underlying market reflected by CNX 500, CNX Small Cap and CNX Mid Cap saw gains of 0.6%, 6.5% and 2.0%, respectively, in April. However, outflows of Rs 1.60 bn in April - although sharply lower compared with Rs 19.35 bn outflows in March - capped the gains.
Other ETFs and global fund of funds report outflows
Other ETFs saw record outflows of Rs 12.13 bn and assets declined 18.20% to Rs 37 bn in April. The category had seen a sharp rise in assets in the previous month due to the launch of Goldman Sachs CPSE ETF, which garnered Rs 30.9 bn. However, profit booking during the current month finally led to the overall decline in assets. Fund of funds investing overseas too saw outflows (of Rs 30 mn) after witnessing inflows for ten months on the trot. The category’s AUM fell by 0.2% to stand at Rs 31.86 bn as of April.
Table 1 – Month-on-month mutual fund flows and AUM distribution
Mutual fund category Net Inflow/ Outflow (Rs bn) Month-end AUM (Rs bn)
Apr-14 Mar-14 2014 Total Apr-14 Mar-14 Difference
Income Funds -99.27 78.38 167.71 4580.09 4606.71 -26.62
Infrastructure Debt Funds 1.88 1.88 6.76 10.74 8.79 1.95
Equity Funds* -1.60 -19.35 -10.86 1922.46 1911.07 11.39
Balanced Funds -1.08 -4.02 -6.27 133.70 167.93 -34.23
Liquid / Money Market Funds 1238.75 -1173.54 743.86 2593.10 1332.80 1260.30
Gilt Funds -3.73 -3.77 -18.22 58.95 61.15 -2.20
Gold ETF Funds -1.46 -1.49 -6.38 85.27 86.76 -1.49
Other ETFs -12.13 30.87 17.75 37.04 45.28 -8.24
Fund of Funds Investing Overseas -0.03 1.53 6.84 31.86 31.91 -0.05
Total 1121.33 -1089.51 901.19 9453.21 8252.40 1200.81
* Includes ELSS

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