Indian Economy News

MF assets hit record high, equity AUM crosses 5 lakh crore for first time

Coimbatore: The assets under management (AUM) of the mutual fund (MF) industry touched a record high of Rs 17.89 lakh crore in February with equity funds seeing their assets cross the Rs 5 lakh crore mark for the first time ever during the month. The AUM of equity MFs (including equity-linked savings schemes or ELSS) increased 4.7% month-on-month to around Rs 5.2 lakh crore in February, data with the Association of Mutual Funds in India (AMFI) showed. The jump in assets was driven primarily by inflows into income, equity and money market schemes. Equity MFs (including ELSS) attracted net inflows of nearly $1 billion (Rs 6,462 crore) in February. Income funds, which invest in a combination of government securities, saw inflows of Rs 10,864 crore while balanced funds that can invest up to 65% in equities, got fresh flows of Rs 5,465 crore. "Continued positive net inflows in long-term assets like equity and balanced funds are an indicator that India is using mutual funds as long-term savings vehicle," said Anjaneya Gautam, national head, MFs, Bajaj Capital. "Balanced funds are fast catching up with equity funds in terms of getting fresh flows. It indicates asset allocation approach is setting in among investors," he said. Only gilt funds and gold exchange traded funds recorded outflows during February.

With the capital markets remaining buoyant in February, equity schemes saw an increase in their AUM through mark-to-market gains as well. The benchmark Sensex and the broader Nifty indices increased by about 3.9% and 3.6% respectively during the month. They have gained 9.1% and 9.5% so far in 2017.

The AUM of the MF industry has risen at a sharp pace in 2016-17— assets have jumped 45% or by Rs 5.56 lakh crore since the end of March last year, AMFI data showed. The assets managed by equity schemes have increased by about Rs 1.34 lakh crore during the period.

Incidentally, the AUM of the MF industry crossed the Rs 10 lakh crore mark only in May 2014 and the Rs 14 lakh crore mark in May 2016. Overall net inflows into MF schemes has nearly doubled so far in 2016-17—to about Rs 3.98 lakh crore at the end of February.

The surge has been led by income and liquid funds. Net inflows into equity schemes however has slowed down in 2016-17. Total inflows into equity MF schemes (including ELSS) fell 17.6% during the 11 month timeframe in 2016-17 to Rs 62,151 crore.

 

 

 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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