Average assets under management (AUM) of mutual fund industry rose 3.7 per cent to a record high of Rs 8.47 lakh crore in the April-June quarter, making it the fifth consecutive quarterly rise, despite the fall in equity funds assets, a Crisil report said today.
The AUM of the previous quarter was at Rs 8.17 lakh crore for the industry.
"The rise was led by heavy inflows into debt mutual funds on the back of interest rate cuts by the Reserve Bank," the report said.
However, equity funds' assets witnessed highest fall in past six quarters, which fell around 5 per cent in the June quarter to Rs 1.99 lakh crore led by heavy outflows.
As per the report, assets under debt and gilt funds saw a rise on strong inflows on the back of expectation of easing interest rate cycle in the coming months.
While assets of long-term debt funds rose 31 per cent to Rs 1.12 lakh crore, gilt funds rose by 10 per cent to Rs 8,600 crore in the quarter.
Similarly, AUMs of short-term debt and ultra short term debt funds also rose on the back of improvement in the banking system's liquidity in the first quarter of this fiscal.
While assets in short-term debt funds rose to Rs 72,800 crore in the June quarter, ultra short-term category's AUM gained by Rs 5,600 crore to Rs 1.05 lakh crore during this period.
However, equity funds' assets saw highest fall in past six quarters with AUM falling for the sixth quarter in a row by around 5 per cent to Rs 1.99 lakh crore, led by heavy outflows despite mark to market gains seen during the quarter.
Meanwhile, average AUM of gold ETF saw a record fall of around 11 per cent to Rs 10,600 crore in the June quarter.
"Investors withdrew their investments from the category in recent months amid a weak trend in underlying asset prices," the rating agency said in a report.
Most fund houses post a rise in average AUM during the June quarter as per the agency with 24 fund houses reporting rise in AUM out of the 44 MF houses.
In the pecking order, HDFC Mutual Fund retained its top position during this period followed by Reliance MF and ICICI Prudential Mutual Fund.