The Mutual Fund Industry in November saw its Assets under Management (AUM) grow 3.25% to Rs 79,3152 crore, higher by Rs 25,000 crore as compared to October, according to AMFI Data released for November.
These are the highest month-end figures for AUM’s since April’2010. The AUMs in the month of October too had seen a 7% growth.
The traction was provided by Money market/liquid funds that saw net inflows worth Rs 11,400 crore, though lower compared to Rs 18,200 crore in the previous month. A CRISIL report added that Inflows in the category were a part of the cyclical money flow in the category as corporates invest their short-term investments in this category during the quarter before withdrawing a major chunk at the end of the quarter to meet their advance tax requirements.
With no change in the interest rates, investors preferred dynamic bond funds, short-term and ultra short –term debt funds within the category. The interest rate uncertainty accrues benefits to these funds. Income funds thus grew by Rs 4,010 crore. The income funds had boosted the AUM’s in October too.
Withe expectations of rate cuts, the Gilt fund too continued to benefit. Gilt funds saw inflows of Rs 1,006 crore in November, the third consecutive month of net inflows in the category. CRISIL Report observes that Investor interest in the category has risen in recent months as the category is expected to benefit when the RBI reverses its stance on interest rates as prices and yields move in opposite directions. A fall in interest rates would result in a rise in bond prices and positively impact gilt fund NAVs.
Interestingly the month-end assets of gold ETFs rose to a record new high with AUM up nearly 3.9% (Rs 44000 crore) to Rs 11,918 crore.The rise in assets was due to inflows as well as mark to market gains in the underlying commodity. The category logged inflows of Rs 270 crore in November versus Rs 387 crore in October. Except for two months, gold ETFs have witnessed net inflows in every month of the current calendar year. Gold prices (represented by the CRISIL Gold Index) rose 1.3% in November due to rise in demand for gold in the festival season.
It was heartening to see Equity funds’ AUM rise by 3.5% (Rs 6500 crore) to Rs 190113 crore despite witnessing outflows for the sixth consecutive month. The rise in the assets for the category was due to mark to market gains from the underlying markets.