The categorys assets rose 3.3% to R1.57 lakh crore, helped by inflows and mark-to-market gains, latest data from Amfi shows. The benchmark CNX Nifty gained 3% in February on positive domestic cues.
Assets under management (AUM) of the Indian mutual fund industry increased 1.45%, or by R13,138 crore, in February to a record R9.16 lakh crore. The spurt was primarily due to inflows into income and equity-oriented funds.
Income funds logged inflows of R12,955 crore, the highest since May 2013. Inflows, coupled with mark-to-market gains, helped income funds AUM rise 3.5% to R4.48 lakh crore in February. The inflows were primarily into FMPs as investors continued to invest in the closed-end funds, lured by higher interest rates offered currently, said a report by Crisil. One-year commercial papers and certificates of deposit traded at 10.12% and 9.76%, respectively, on February 28, compared with 10% and 9.64% on January 31.
Investors continued to exit gold exchange traded funds (ETFs) for the ninth consecutive month in February, amid weak sentiment for the underlying asset class. The latest month saw outflows of R178 crore, compared with R165 crore in the previous month. However, the categorys assets grew 3.7%, to R9,330 crore in February, helped by a consistent rise in gold price. The asset class, as represented by the Crisil Gold Index, gained 5.71% in February, following a rise in international prices.
Liquid funds AUM fell 3.15% to R2.51 lakh crore due to outflows of R9,629 crore during the month, capping higher gains for the mutual fund industry assets. Persistent worries over the RBIs monetary tightening continued to take a toll on gilt funds, as the category witnessed outflows of R937 crore in February, the highest since September 2013. The categorys assets ended the month at R6,481 crore.
Fund of funds investing overseas saw inflows for the ninth consecutive month in February. At R33,000 crore, the inflows were the most since May 2011 and together with mark-to-market gains pushed the categorys AUM up 17% to a record R3,194 crore. The category has caught investors attention as improving prospects of developed economies and a soft rupee has shored up returns, said Crisil.