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MF Assets Set Record at Rs 7.22 Lakh Crore

This time the assets have not been driven up by equity markets

The huge amounts of inflows in income and liquid schemes have taken the mutual fund industry’s assets to record highs.

Mutual fund assets have crossed the Rs 7 lakh crore mark for the first time reaching as high as 7.22 lakh crore, according to data provided by AMFI for the month of July.

This is a growth of 23.84 per cent or Rs 1.24 lakh crore over the assets during the end of June 2009. A closer look reveals that in June, funds went out from income and liquid schemes. But market trends made them come back again as one saw net inflows of Rs 95,764 crore in income funds while the figures stood at Rs 24,698 crore for liquid funds. This is being pushed largely by corporates and institutions.

Equity funds saw net inflows to the tune of Rs 4,232 crore in July. Two open-end equity schemes -- Birla Sun Life Enhanced Arbitrage Fund and Reliance Infrastructure Fund garnered a total of Rs 2,394 crore through their new fund offers.

However, the story was not the same for the gilt funds category. In July, the medium term gilt funds lost 0.12 per cent while the short term gilt funds gained a marginal 0.06 per cent. They saw a net outflow of assets which ran up to the tune of Rs 1,061 crore. What is more, this was the fourth consecutive month that the category saw net outflows of funds.

There have been worries due to the large scale government borrowings that have caused the 10 year GOI yield to rise from 5.86 per cent at the start of February 2009 to 6.97 per cent by the end of July 2009.

The other categories that lost money this month were ETFs, other than gold ETFs, and overseas Fund of Funds. Marginal net inflows worth Rs 40 crore were also recorded under Gold ETFs which gained 0.74 per cent this month.