MFs turn tide, assets surge 7%

The industry added Rs 11,378.34 cr to its AUM in July.

The mutual fund industry clocked a 6.88 per cent growth in assets under management (AUM) in July. According to data released by the Association of Mutual Funds India (AMFI), the industry added Rs 11378.34 crore to its AUM during the month.

The total assets managed by mutual funds by the end of July stands at Rs 1,75,897 crores. This is an improvement between May and June, when there was a 1.94 per cent decline in assets as redemptions outpaced sales. AUM for June amounted to Rs 1,64,518 crore.

Among the fund categories, equity mutual funds were the prime gainers, as they were able to successfully garner solid returns.

Diversified schemes registered an average return of 8.6 per cent in July, outperforming the benchmark Sensex and Nifty. Sensex returns amounted to 4.96 per cent in July, while the Nifty went up 5.65 per cent.

Reliance Mutual Fund witnessed the highest increase in AUM in absolute terms. The fund added Rs 3,227.98 crore to its assets during July, which translates into a 32.58 per cent growth. The fund had assets worth Rs 9,907 crore under its belt in June, which went up to Rs 13,135 crore at the end of July.

"The markets have been very buoyant and we were able to pick the right stocks. Our investment philosophy to stay with our stocks for a long time paid off," said an official with Reliance Mutual. The Reliance Opportunity Fund was the biggest gainer, gathering Rs 1,700 crore.

ABN Amro Mutual Fund was the second largest gainer, up 25.37 per cent from Rs 1,580 crore to Rs 1,981 crore. Principal Mutual Fund achieved an increase of about 300 crore from Rs 6,264 crore in June to Rs 6,542 crore in July.

The Benchmark Mutual Fund witnessed the highest increase in percentage terms, as it surged 178 per cent from Rs.619.67 crore to Rs.1,724.44 crore.

Rajan Mehta, executive director of Benchmark Asset Management Company, attributed the growth to the burgeoning markets, which led to increasing interest in mutual funds.

"We received a lot of fresh flows in our ETF fund, with FIIs contributing a significant share of it. Moreover, we had a very small base, which makes the figure look large."

The Sahara Mutual Fund was the biggest loser in the month, down 25.70 per cent from 565.50 crore to Rs 420.15 crore followed by Alliance Mutual Fund (2.18 per cent) and DSP Merrill Lynch Mutual Fund (0.8 per cent).

As far as market activity was concerned, mutual funds were net buyers in both equity and debt by Rs 504.86 crore and Rs 3812.93 crore respectively in July. In comparison, FIIs were net buyers of Rs.7934.1 crore in equities and net sellers of Rs.173.9 crore in debt markets.