Mutual fund industry asset base rises by Rs two-trillion in 2012

Dec 28 2012, 14:27 IST
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Mutual funds assets base seen nearing Rs 8 trillion with an increase of about Rs two trillion this year.  (Reuters) Mutual funds assets base seen nearing Rs 8 trillion with an increase of about Rs two trillion this year. (Reuters)
SummaryAfter 2 years of decline, mutual fund industry managed to register a smart turnover.

funds have contributed the most to the industry's rising AUM. With inflows of Rs 89,302 crore, money market funds AUM surged to Rs 1.77 lakh crore. A similar trend was seen in liquid funds, where inflows rose to Rs 80,880 crore taking the assets managed by the fund to Rs 3.87 lakh crore.

Similarly, equity funds' AUM rose to Rs 1.65 lakh crore despite registering outflows of more than Rs 9,300 crore. AUM of equity linked savings scheme too increased to Rs 25,027 crore though it saw investors pull out over Rs 1,400 crore this year. Interestingly, equity fund managers of mutual fund industry has betted big on banking space with investments worth more than Rs 42,000 investment, which was 20.59 per cent of the industry's total equity assets under management.

Diversified large cap focused equity funds did well during the year, but few sectors such as private sector banks, MNC companies in the space of FMCG and select pharma have delivered substantially higher than even the index.

Gilt funds saw a rise in assets to Rs 5,426 crore due to inflows of Rs 1,567 crore this year as investors interest in the category has risen in recent months.

Incidentally, Gold ETF assets neared the Rs 12,000 crore mark as the category has seen inflows of Rs 954 crore. The rise in assets was due to inflows and mark to market gains in the underlying commodity.

"Gold AUMs have increased due to a combination of increase in the price of gold as well as continued inflows into Gold ETFs and Gold Fund of Fund Schemes.

"India has always been natural buyer of gold and with the advent of ETF's, more investors are looking at investing in this option (ETF's). Physical gold still retains its charm in India for ornamental purposes," Patel said.

In order to boost the mutual fund industry, Sebi has announced a slew of measures including expanding its distribution network and making investment more simpler and safer, among other steps.

The regulator has made it compulsory for fund houses to make more disclosures in the interest of investors. They are also required to shift to the one plan per scheme model, moving away from the present practice of cluttering one scheme with numerous plans.

At the same time, Sebi decided that any service tax would be charged to the ultimate investor,

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