Mutual fund(MF) inflows rose 3.3% in August as banks invested in debt funds. The average assets under management (AAUM) for August stood at Rs 6.87 lakh crore witnessing inflows of Rs 21,900 crore, Association of Mutual Funds in India (Amfi) data showed. Baroda PioneerMF CEO Rajan Krishnan said, ?After challenging months of June and July, liquidity concerns are easing and funds are coming back into the industry. However, we are not witnessing much movement on the equity side as markets remain range-bound.? Retail investors typically invest into MFs only after a strong rally, he added.

Also, some money in August via new fund offerings (NFO), market participants said. Motilal Oswal MF, which had launched its ETF recently, saw its assets grow by over Rs 253 crore in August, while it was Rs 1,450 crore for IDBIMF. Krishnamurthy Vijayan, MD and CEO of IDBIMF, said, ?Besides liquid fund getting decent inflows, over 2,500 new SIPs came in August through our ETF scheme.?

In June and July, mutual fund industry had witnessed erosion of assets as banks had pulled out money under tight liquidity conditions. Even retail equity investor’s had redeemed after a surge in the equity market valuations.

Out of 41 fund houses, 10 fund houses including DeutscheMF (-22.1%), EdelweissMF (-21.2%) and FortisMF (-15.6%) saw most dip in their respective AAUM. In contrast, Peerless MF, Axis MF and JP Morgan saw a jump in its assets. Reliance MF continued to remain at the top with AAUM of Rs 1.04 lakh crore. Its assets saw a rise of Rs 2,300 crore, or 2.3%, compared to July.

HDFC MF AAUM stood at Rs 90,178 crore, up 6.6%, or Rs 5,550 crore, against Rs 84,628 crore over July. Assets of ICICI Prudential MF rose marginally by 0.08% to Rs 68,768 crore in August while it was 4.36% to over Rs 64,200 crore for Birla Sun Life MF.

Some of the industry players feel that despite surge in AAUM for August, equity funds have witnessed redemption pressure. This data would be disclosed by Amfi only by mid-September and things might not be rosy for the month ahead.?Again in September we might witness drop in AAUM as its end of quarter and banks might again pull-out money to pay advance tax.?