Mutual funds (MF) are sitting on a whopping Rs 13,957.4-crore of cash, which is waiting to be deployed in the market, a mutual fund analyst said.
"Mutual funds are sitting on whopping Rs 13,957.4-crore of cash, but fund managers are anticipating correction before deploying it in the market, Sharekhan Ltd's Mutual Fund analyst, Sapna Jhawar, said here today.
Flush with cash, MFs are well placed to maintain the buying interest and propel the market forward, Jhawar said.
MFs bought stocks in banking and pharmaceutical sectors and slashed their exposure in power, telecommunications and oil and gas sectors in September 2009, she said.
Of the Rs 13,045.4 crore lies with the existing MFs, while the remaining Rs 912-crore has been mobilised through the NFOs.
The total Assets Under Management (AUM) of equity MFs stood at Rs 213,043.5-crore in September 2009, a growth of 5.4 per cent from August 2009. On adjusting for the net inflows/outflows, the growth stood at 6.4 per cent, which was marginally lower than the growth in the market, which grew by 7.5 per cent in the same period.
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Birla Sun life Mutual Fund saw the largest increase of Rs 2,008.9-crore in its AUM, followed by Baroda Pioneer and Canara Robeco Mutual Fund.
Fund managers made gross sales worth Rs 18,816.6-crore and turned net sellers to the tune of Rs 2,333.6-crore during the month.
Equity MFs (includes balanced schemes and equity- linked saving schemes) registered a net outflow of Rs 1,911-crore in September 2009.
Equity funds reported net outflows for the second consecutive month, as equity funds felt the heat of scrapping of the entry fees by the market regulator.
Fund flows into the existing schemes declined by 11.5 per cent. The deterioration in the fund flows was largely due to a 40 per cent rise in total redemption volumes witnessed in September 2009.
On the other hand, the inflows into new fund offerings (NFOs) rose more than ten-fold to Rs 912-crore as compared with only Rs 82-crore in August 2009).
Fund flows into the existing schemes declined by 11.5 per cent. The NFO collections include the amounts raised by Shinsei Industry Leaders Fund, Kotak Select Focus, Sahara Star Value Fund, Franklin Build India Fund and Canara Robeco FORCE Fund.
In line with the upward trend in the equity markets during the month, all sector funds delivered positive returns in September 2009 except the FMCG Index, which gave a slightly negative return.
While banking, automobile and pharmaceutical funds outperformed the Sensex, the fast moving consumer goods (FMCG) funds underperformed the Sensex.
The information technology (IT) funds delivered returns that were in line with the Sensex. Additionally, while automobile, pharmaceutical, banking and technology funds underperformed the BSE Auto Index, the BSE Healthcare Index, the BSE Bankex and the BSE IT Index respectively, funds in the FMCG sector outperformed the BSE FMCG Index.
Banking funds gave the highest returns in September 2009, followed by automobile funds and pharmaceutical funds.