The Hindu Business Line : Mutual funds asset base swells by Rs 86,180 cr in July

Mumbai, Aug. 2 The asset base of the mutual fund industry has surged by a record Rs 86,180 crore in July 2007, according to data released by the Association of Mutual Funds in India (AMFI). The total assets under management for the industry stands at Rs 4,86,513.71 crore, an increase of 21.5 per cent over Rs 4,00,332.99 crore recorded in June 2007.

Of the total 32 fund houses, the asset base of 30 witnessed substantial inflows in July. Only the assets under management (AUM) of two fund houses, Benchmark Mutual Fund and Quantum Mutual Fund have fallen.

Fund managers said that the industry gained inflows from the ample liquidity in the markets in the past month, with call rates touching an all-time low.

“Liquid and liquid-plus schemes have been performing very well. There is a lot of interest in these schemes as they offer better returns than Fixed Maturity Plans (FMPs),” said Mr A. Balasubramanian, Chief Investment Officer, Birla Sun Life Mutual Fund.

“A lot of corporates have also moved money into mutual funds. In addition, there were many large IPOs this past month, which brought money in,” Mr Jaideep Bhattacharya, Chief Marketing Officer, UTI Mutual Fund, said.

A number of new fund offers in the past month and the rally in the stock market have also led to the increase in AUMs.

New Fund Offers such as Reliance Equity Advantage Fund and Franklin Templeton High Group Companies Fund brought in a large amount of money.

Bringing in money

“A large amount of money was put into equity schemes through the NFOs. The markets rising by over 6 per cent in July has had an impact on the mutual fund industry as well,” said Mr Bhattacharya.

The increased interest in growth or equity schemes has been encouraging, with more retail investors entering equity funds through systematic investment plans, he said.

Reliance Mutual Fund maintained its top position reporting the highest AUM, as well as the highest inflows in July. The fund house saw Rs 6,563.02 crore being pumped-in in July, a growth of 10.96 per cent over June.

ICICI Prudential Mutual Fund followed Reliance MF at Rs 48,688.56 crore, recording an increase of 11.63 per cent in July. This was followed by UTI Mutual Fund at Rs 42,547.61 crore.

In the past year, from July 2006 until this month, the highest inflows in the industry stood at Rs 57,474 crore in May 2007, rising by 16 per cent from April.