Take for instance, Birla Mutual Fund. The corpus under Birla Advantage (BAF) has grown to Rs 365 crore from Rs 155 crore with the bulk of growth in assets coming from a booming equity market (see table). In comparison, though Birla Income Plus has witnessed a lower growth in assets to Rs 1670 crore, it seems to have attracted fresh investors in droves. The NAV of BAF has shot up by 63 per cent between January 31 and September 15 while that of BIP (growth option) has gained only around 8.5 percent. Assuming that entire investments are under the growth option, the unit capital of BIP is estimated to have risen 88 per cent to Rs 1016 crore. On the other hand, the unit capital of BAF has moved up by only 45.45 per cent to Rs 112 crore during the same period.

"Equity funds have reaped the benefit of the spurt in equities though the Indian investor is yet to find a fancy for growth funds. A lot of money from high net worth individuals and corporates is flowing into debt funds as they can readily make a part of their investments tax-free without exposing themselves to the gyrations of the equity market," said a fund manager.

"Despite being well-informed about equities, a host of corporates still prefer debt funds. Even investors in most of the companies do not like to see equity funds in the balance sheets," added a debt fund manager.

The growth of open-end debt funds is also attributed to the near-absence of any assured return plan this year. It is only after a gap of six months that UTI haslaunched its second MIP. "As more and more investors understand the benefits of an open-end debt fund, the shift is beginning to take place from closed-end MIPs to highly liquid debt plans. Take for instance, Alliance MIP, which does not assure returns but has been generating higher returns than UTI's MIP. To top it, Alliance MIP is open-end,'' said an analyst.

A number of AMCs have also shifted to declaration of monthly and quarterly dividends to make their debt plans tax-efficient. For instance, Birla Cash Plus, a short-term debt plans, now pays a fortnightly dividend. "Besides tax-efficiency, there is a growing apprehension in the industry that the tax-free status will be taken away before three years. Hence, the mushrooming dividend options to give maximum benefit to the investor," said a head of a mutual fund. Even as equity funds get all the attention and debt funds a massive share of the moolah, AMCs are making an attempt to imbibe equity culture among investors.