After facing trouble for four months, the mutual fund industry seems to be limping back to life. The industry’s February-end average assets under management (AAUM) are back to slightly-over Rs 5 lakh crore, bringing it close to September-end figures of Rs 5.3 lakh crores, according to data from Amfi.
The reason: Debt funds collections picked up quite sharply in this period.
Dhirendra Kumar, chief executive officer, Value Research, said that investors were parking their funds in gilt, bond and liquid funds as they were anticipating rate cuts from the Reserve Bank of India (RBI).
In the last three months, short-term debt funds gave returns of 4.26 per cent. Even medium-term debt and medium- and long-term gilt funds gave returns of 4.15 and 3.15 per cent, respectively.
Last October, the mutual fund industry had suffered heavy redemptions, with AAUM falling by a whopping Rs 97,000 crore to Rs 4.31 lakh crore.
Fund managers said that, in the near future, debt funds would continue to find favour.
