Equity funds continue to see outflows in Nov

NEW DELHI: Equity-oriented schemes continued to see outflows in November despite assets under management of the entire mutual fund industry crossing a record Rs 8 lakh crore level in the month.

The mutual fund industry's average assets under management (AUM) have doubled to over Rs 8 lakh crore in November this year as compared Rs 4 trillion levels seen a year-ago, when they had dropped to following the onset of the global credit and liquidity crisis.

"MF assets grew primarily on account of continuous inflows into Ultra short term debt funds. Mark to market gains in equity funds also contributed to asset gains to some extent. Banks were among key investors and held a fifth of the industry AUM," Crisil FundServices Director Krishnan Sitaraman said.

As per the report by Crisil FundServices, average AUM rose by around six per cent or 45,071 crore in November to Rs 8.09 lakh crore -- a fresh all time high --from Rs 7.63 lakh crore in October.

"However, equity funds, continued to bear the brunt of outflows for the fourth month in a row," the report stated.

"These outflows were on three counts. Firstly profit booking, secondly due to lower sales as a result of lower distributor interest in selling equity funds following the SEBI ban on entry loads post August 1, 2009. The third reason is lack of new fund offers," Sitaraman added.

Equity scheme purchases have dropped by over 50 per cent from Rs 9,000 crore levels in July to about Rs 4,500 crore in November.

However, equity markets did well in November, with the S&P CNX Nifty rising by nearly seven per cent. Gains were driven by continuing liquidity, positive global cues and buoyant GDP and industrial growth numbers, the report added.

Last month saw another fund house --HDFC MF-- cross the Rs one lakh crore assets mark. So far Reliance Mutual Fund held the sole honour on this front till date, it added.