The Indian mutual fund industry's assets under management jumped 9.4 per cent to a record high of Rs 9.03 lakh crore in January on the back of strong inflows into liquid funds.
According a report by Crisil, the mutual fund industry's assets under management (AUM) was at Rs 8.25 lakh crore in December 2013. The figure stood at Rs 8.90 lakh crore in November 2013.
There are about 45 fund houses in the country. The rise in monthly AUM in January 2014 was primarily on account of Rs 83,500 crore inflows -- the highest since April 2013. "Bulk of the inflows during the month was into money market/ liquid funds," the Crisil report said.
As per the report, liquid funds saw net inflows worth Rs 77,500 crore, the highest in nine months, leading to a 43 per cent rise in the segment's AUM to Rs 2.59 lakh crore. This was chiefly due to periodical inflows in the banking system – quarter-end outflows (December) in the category are typically reversed in the subsequent month (January).
Besides, income funds (long-term, short-term and ultra short-term debt funds, and fixed maturity plans, or FMPs) reported net inflows of Rs 5,900 crore after two consecutive months of outflows in November and December.
Inflows were primarily into short-term maturity debt funds and FMPs due to the attractive short-term rates caused by the RBI's monetary tightening measures.
Equity funds' recorded inflows for the third consecutive month in January at Rs 427 crore. However, the amount was less than Rs 699 crore in November and Rs 857 crore in December.
The category's assets, however, declined four per cent to Rs 1.75 lakh crore during the month, dragged lower by weakness in the underlying market.
Meanwhile, investors continued to exit gold exchange traded funds (ETFs) and gilt funds.