The assets of Indian private sector mutual funds have grown to Rs 4,292 crore from Rs 2,225 crore, a rise of 93 per cent. They have also accounted for 78 per cent of the total gross sales mobilisations. Private sector funds have mobilised over Rs 67,000 crore during the year, compared to a mere Rs 25,000 crore during the previous, a growth of 167 per cent.

In terms of gross mobilisations, even banks and institutions sponsored funds have shown a growth of 177 per cent. But they were not notable to curtail the redemptions and ended with net outflow of over Rs 1,300 crore. Private sector funds have been able to retain atleast 20 per cent of the gross mobilisations and ended up with over Rs 13,700 crore of net sales.

The markets conditions as well as return expectations influenced the investors' decision to shift from one asset class to another. Sales mobilisations and growth in assets indicates the change in investors' preferences.

Investors favoured equity and bond funds during the initial half of the year, but uncertainty and volatility made them move to liquid funds. The shift was more apparent in the third quarter, as income funds have shown a net sales of Rs 150 crore, while equity funds saw redemptions of Rs 2,185 crore.

Gilt funds were also big losers in the last three quarters with net redemptions of Rs 493 crore. The investors withdrew money from these asset classes and invested in liquid funds, which saw a net sales of around Rs 1,400 crore.

The year also witnessed a series of innovative funds being launched. UTI pioneered the launch of assured return monthly income plans (MIPs) and became popular among investors.

Alliance MF launched the first open-end non-assured MIP. Some mutual funds also launched serial funds targeted at those investors who want tax-efficient returns but were not willing to take the interest rate risk. Corporates found these serial funds to be an attractive investment avenue as they are giving them tax-efficient yields along with indicative yields.