December saw reversal of trend in investments in equity schemes with net inflow of Rs 967 crore
Mumbai: Retail investors, who largely invest in equity funds, are apparently staying invested in mutual fund schemes. After shrinking for six consecutive months, the AUM of equity schemes increased in December 2010.
The first sign of equity investments turning positive was in November when equity AUM remained nearly flat.
In December, there was net inflow of Rs 967 crore in equity and ELSS mutual schemes. Two equity NFOs by Pramerica Mutual Fund and one by Principal Mutual Fund together mobilised Rs 290 crore.
The equity AUM of mutual funds increased by 2.23 per cent to Rs 2,08,235 crore at the end of December 2010 from Rs 2,03,677 crore a month earlier.
The overall AUM of mutual funds declined by 5.8 per cent to Rs. 6,26,314 crore in December 2010 from a month earlier, according to data released by AMFI on its website.
The decline in AUM was due to substantial outflows from fixed income funds. The AUM of fixed income funds fell by Rs 32,698 crore in December, against inflows of Rs 11,307 crore in November 2010. “Banks and companies redeem investments towards the end of the quarter for advance tax payment and capital adequacy requirement, which is very standard” says Mahhendra Kumar Jajoo, Executive Director, Fixed Income, Pramerica Mutual Fund, explaining the cause of the fall in AUM of fixed income schemes.
Funds Inflows and Outflows for December 2010
Category Net Inflow/(Outflow) Rs. Crore Income -32,698 Equity 877 Balanced 326 Liquid/Money Market -12,500 Gilt -369 ELSS-Equity 90 Gold ETFs 111 Other ETFs -162 Fund of Funds Investing Overseas -24 Total -44,349
Source: AMFI
The mutual fund industry collected a total of Rs 12,577 crore from sale of units of new schemes in December 2010, a 12 per cent increase from the previous month. The MF industry launched 34 new fixed income schemes mobilising Rs 12,287 crore, while three new equity schemes collected Rs 290 crore as compared to nothing the previous month.
