Assets under management (AUM) of mutual fund industry posted a marginal rise of 0.7 per cent to Rs 7.66 lakh crore in August, contributed mainly by net inflows into liquid funds, a Crisil report said today.
As per the rating agency, liquid funds' AUM rose by 16 per cent to Rs 1.50 lakh crore on the back of inflows of Rs 32,100 crore into this category.
"The category reversed its outflows seen in the previous month (July) as market participants got acclimatised to the tight liquidity conditions in the banking system."
During July, liquid funds witnessed redemption pressure of Rs 45,300 crore on the back of liquid tightening measures of the Reserve Bank of India (RBI).
Interestingly, equity mutual funds also saw inflows in August of Rs 460 crore as compared to Rs 1,800 crore outflows in the previous month.
"Equity category was also a net buyer in the equity market in August and bought worth Rs 1,600 crore, making it the first month of positive net buying by mutual funds since June 2012," the report said.
Meanwhile, income funds saw the largest outflows since December 2012 with its AUM falling by 2.66 per cent to Rs 4.20 lakh crore during the last month, it said.
"The outflow was due to recent volatility in the debt market following de facto monetary tightening measures by the central bank coupled with negative returns from the category."
In the gilt fund category, the AUM rose 8.4 per cent to Rs 8,900 crore in August. "The category's assets gained despite posting mark-to-market (MTM) losses due to inflows of Rs 900 crore as market participants renewed interest in government bonds after the RBI measures," Crisil said.
However, FMPs (fixed maturity plans) saw significant investor interest on the back of RBI's liquidity tightening measures, prompting a lot of buying interest in these schemes.
In the gold ETF category, the AUM rose 11 per cent to Rs 11,800 crore, led by MTM gains as well as the underlying asset prices. The report, however, noted that the category saw record outflows of Rs 590 crore in August.
Meanwhile, fund of funds, which enable investors to put money in overseas assets continued to attract inflows. The AUM under such schemes rose by 14.6 per cent to Rs 2,370 crore in August.