Debt funds boost MF assets to Rs.7.57 tn in Aug

MUMBAI: The Indian mutual fund industry���s assets under management touched a new peak of Rs.7.57 trillion at the end of August, thought the growth was moderate at 5 percent over the previous month. The month under review saw net inflows of Rs.327 billion across categories with debt funds witnessing Rs.383 billion of net inflows. All other key categories saw net outflows. Liquid funds saw the highest net outflows among mutual fund categories, to the tune of Rs.52 billion in August. This was driven by lower returns which led investors to shift to ultra short term debt funds.

On the returns front, equity funds out-performed on the back of a strong performance from midcap and small cap funds while the long term debt funds saw negative returns due to rising yields, according to CRISIL FundServices.

���Ultra short term debt funds saw strong inflows in August, with banks parking their surplus funds in these schemes. At the same time, the new rule of no entry loads seems to have initially dulled the inflows into equity funds even though fund performances were good for the month,��� said Krishnan Sitaraman, Director ��� CRISIL FundServices.

CRISIL���s analysis of over 300 equity oriented schemes shows that over 250 schemes gave better 1-month returns than the S&P CNX Nifty in August. Midcap and small cap funds posted better returns than large cap funds and benchmark indices across all periods analysed (1 month, 3 months and 1 year).

���The realty, consumer durables and technology sectors were significant out-performers
in the month which saw benchmark equity indices ending flat reflecting in the S&P CNX Nifty rising 0.6 percent,��� Sitaraman added.

Mutual funds��� average AUM has now risen by over 85 percent since the liquidity crisis in the last quarter 2008 when industry average AUM had dropped to around Rs.4 trillion in November 2008.