MF assets cross Rs 10 trillion mark: CRISIL

Investors continued to shy away from gold ETFs as visible from the outflow trend recorded in the past twelve consecutive months

June 06, 2014 4:58 IST | India Infoline News Service
The Indian mutual fund industry’s assets under management (AUM) scaled new highs, surpassing the Rs 10 trillion mark in May 2014. The industry’s AUM rose 7% or Rs 657.81 bn to Rs 10.11 trillion in May 2014 from Rs 9.45 trillion in the previous month, according to the monthly numbers released by the Association of Mutual Funds in India (AMFI). The rise in the AUM was primarily due to inflows across major mutual fund categories and surge in domestic equity markets.
Equity funds attract the highest inflows in over three years
Marking its clear revival, equity funds attracted inflows of Rs 20.22 bn in May – the highest since February 2011 – on the back of renewed interest in the asset class. The category’s AUM rose to a record high of Rs 2.17 trillion – the highest monthly growth (13% or Rs 249.88 bn) in the past five years – led by inflows and mark-to-market (MTM) gains. The underlying equity asset class represented by CNX Nifty Index surged by 8% during the month on the back of heavy capital inflows following the positive election outcome. Hopes of economic reforms by the new government have revived investors’ interest in the equity asset class.
Income funds register inflows Rs 100.96 bn
Income funds, which logged outflows of Rs 99.27 bn in the preceding month, saw a reversal in trend. They attracted inflows of Rs 100.96 bn in May 2014. The open ended income funds attracted the majority of inflows (Rs 75.56 bn) while the closed ended funds like FMPs etc attracted Rs 33.01 bn. Income funds’ assets grew by 3.5% or Rs 158.78 bn to Rs 4.74 trillion due to inflows and MTM gains. 
Gilt funds continue to lose for the sixth consecutive month
Gilts funds registered outflows (Rs 3.18 bn) for the sixth consecutive month in May 2014; however, a fall in the asset was capped by MTM gains seen in the month. The 10 year G-sec yield eased by 19 basis points (bps) to close at 8.64%. The category’s AUM fell by 3.4% or Rs 2.01 bn to Rs 56.94 bn during the month.
Liquid funds’ AUM rose by 9%
Liquid funds’ AUM rose by 9% or Rs 233.90 bn to Rs 2.83 trillion led by inflows of Rs 220.10 bn plus MTM gains. Inflows in the category are subject to the cyclical trend; the category typically sees outflows in the quarter-end month and subsequent inflows in the following two months (outflow in March, inflows in April and May). Improved liquidity in the banking system also supported the inflows into the category.
Gold ETFs see outflows for the past one year
Investors continued to shy away from gold ETFs as visible from the outflow trend recorded in the past twelve consecutive months. The latest month registered outflows of Rs 3.41 bn with consolidated outflows of Rs 27.50 bn in the past one year. The fall in AUM by 8.7% or Rs 7.46 bn – highest in the past eight months -- was further magnified by MTM losses as the underlying asset prices (represented by CRISIL Gold Index) fell by 4.8% during the month. Gold ETFs’ AUM currently stands at Rs 77.81 bn. 
Other ETFs see robust inflows of Rs 5.76 bn
Assets managed under the other ETFs category rose to a record high of Rs 48.29 bn with a growth 30% or Rs 11.25 bn due to strong inflows and MTM gains. After witnessing record inflows of Rs 30.87 bn in March (primarily into the Goldman Sachs CPSE ETF), the category attracted its second best inflows of Rs 5.76 bn in May. 
Table 1 – Month-on-month mutual fund flows and AUM distribution
Mutual fund category Net Inflow/ Outflow (Rs bn) Month-end AUM (Rs bn)
May-14 Apr-14 2014 Total May-14 Apr-14 Difference
Income Funds 100.96 -99.27 268.67 4738.87 4580.09 158.78
Infrastructure Debt Funds 0.00 1.88 6.76 10.82 10.74 0.08
Equity Funds* 20.22 -1.60 9.36 2172.34 1922.46 249.88
Balanced Funds -0.83 -1.08 -7.10 147.28 133.70 13.58
Liquid / Money Market Funds 220.10 1238.75 963.96 2827.00 2593.10 233.90
Gilt Funds -3.18 -3.73 -21.40 56.94 58.95 -2.01
Gold ETF Funds -3.41 -1.46 -9.79 77.81 85.27 -7.46
Other ETFs 5.76 -12.13 23.51 48.29 37.04 11.25
Fund of Funds Investing Overseas 0.00 -0.03 6.84 31.67 31.86 -0.19
Total 339.62 1121.33 1240.81 10111.02 9453.21 657.81
* * Includes ELSS

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