MF assets dip 5% on liquid fund outflow

Assets under management of the mutual fund industry were Rs 3.235 trillion in end-December, down 5.21 per cent over previous month, on huge outflows in liquid funds, according to Association of Mutual Funds in India data.

In November, assets rose 10 per cent led by inflows in cash plans and rise in stock indices.

During December, advance tax payments and hike in banks' cash reserve ratio took a toll on liquid funds, which recorded 20.15 per cent erosion in assets.

Companies redeemed investments in liquid schemes to make advance tax payments, which were due by December 15, and while banks redeemed to meet CRR requirements.

Last month, Reserve Bank of India hiked CRR by 50 basis points to 5.5 per cent. The CRR, which took effect in two-equal stages on December 23 and January 6, drained nearly Rs 13500 crore from the banking system. 
 

FEELING LOW
Category	Dec 29	Nov 30	Category	Dec 29	Nov 30
ASSETS			GROSS INFLOWS
Liquid	977.57	1224.22	Income	201.95	226.14
Gilt	20.57	20.95	Equity	111.54	88.64
Income	863.50	867.02	Balanced	9.62	2.40
Equity	1195.38	1135.48	Liquid	1382.70	1551.09
ELSS	87.26	82.34	Gilt	0.89	1.43
Balanced	91.70	83.77	ELSS	4.16	1.97
Total	3235.98	3413.78	Total	1710.86	1871.67
REDEMPTION
Income	216.11	156.38	Liquid	1641.77	1386.64
Equity	60.61	68.11	Gilt	1.12	2.10
Balanced	2.25	3.19	ELSS	0.17	0.24
			Total	1922.03	1616.66

Liquid fund recorded outflows of Rs 25907 crore compared with inflows of Rs 16445 crore in November.

Redemption in liquid funds was also by some companies who did not want to their mutual fund investments to reflect in their October-December earnings. Barring equity and balanced funds, all schemes registered net outflows.

In December, 36 new schemes collected Rs 15179 crore. Of these, 27 debt funds, mainly fixed maturity plans, raised Rs 9459 crore.India's first capital protection fund from Franklin Templeton Mutual, Franklin Templeton Capital Safety Fund, launched in December, raised Rs 500 crore.

Despite new funds, debt schemes did not reported net inflows. On equity side, seven new schemes mopped up Rs 5002 crore, including Rs 2100 crore collected each by Prudential ICICI Equity and Derivative Fund, and Reliance Equity Fund.

Overall, diversified equity funds posted net inflows of Rs 5093 crore, indicating redemption in existing equity schemes.

Outflows in liquid schemes pulled down debt schemes' share in industry assets to 57.53 per cent in December from 61.87 per cent in November.

On the other hand, equity funds contributed to 39.64 per cent of industry assets compared with 35.67 per cent in November. Balanced funds remained more or less stable at 2.83 per cent.

UTI Mutual continued to dominate the asset tally with Rs 38109 crore worth assets. In December, Reliance Mutual displaced Prudential ICICI Mutual to bag the second position in the assets position.

Assets under management of Reliance Mutual and Prudential ICICI Mutual stood at Rs 36928 crore and Rs 33305 crore respectively.

Top five fund houses, which include HDFC Mutual and Franklin Templeton Mutual, control nearly 50 per cent of industry assets.