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Wednesday, March 10, 2010

Total assets of MF increased marginally by 1.08% in February 2010

Liquid/money market funds recorded increase in their asset base 

The mutual fund (MF) industry registered meager 1.08% increase in total asset under management (AUM) to Rs 7.67 lakh crore ending February 2010 from Rs 7.59 lakh crore in January 2010. Almost all the fund categories except for Gilt funds witnessed increase in total asset however, the rise was very marginal. 

The Average Assets Under Management (AAUM) of Mutual Fund Industry has grown 2.64% for February 2010, after facing 4.14% fall in January 2010, according to the data released by the Association of Mutual Funds in India (AMFI). The industry has been back on the growth path, after witnessing fall in AAUM for two consecutive months. The AAUM of 38 fund houses stood at Rs 7.82 lakh crore in February compared with Rs 7.62 lakh crore (for 37 fund houses) in January 10. 

Association of Mutual Funds in India (AMFI) has released monthly data of the industry for February 2010. The industry has launched 13 new schemes in February, out of which ten schemes belong to income fund, one under liquid/money market funds, one under other ETFs and finally one under fund of funds category. The new funds launched mobilized around Rs 2840 crore during the month under review.

While, all the categories posted marginal growth, it was only Gilt funds that witnessed 5.65% fall in growth during the month of February 2010. The Gold ETF's stole the show recording 11.09% growth for the month under review. 

The month of February 2010 witnessed a reversal in trend with the Liquid/money market funds recording a rise of 2.14% contrary to consecutive fall in the past three months. Moreover, the Income funds which registered the highest growth of 30.58% in January 2010 reported marginal growth of 1.21% during the month of February 2010. 

The MF industry recorded the net inflow of Rs 6365 crore in February 2010 against the inflow of Rs 97242 crore in January 2010.

Equity Funds
The total asset of equity funds has increased marginally by 0.33% to 1.69 lakh crore as on February 2010 from 1.68 lakh crore as on 31 January 2010, as equity benchmark indices witnessed marginal rise during the month under review. Bombay Stock Exchange's Sensex and National Stock Exchange's Nifty increased 0.44% and 0.82%, in February 2010.

The marginal rise in asset base kept the weightage of equity funds steady at 22% in the total assets of the industry as on February 2010. The equity funds witnessed a net inflow of Rs 1514 crore and total redemption of Rs 3492 crore in the month of February 2010. 

Income Funds
The Income funds that stood in limelight with highest inflow of Rs 1.06 lakh crore in January 2010 witnessed only an inflow of Rs 4887 crore during the month with the redemption remaining quite heavy at Rs 2.55 lakh crore. 

Moreover, the total asset of income fund increased marginally by 1.21% to 4.76 lakh crore compared to spurt of 30.58% to 4.71 lakh crore in January 2010. However, the income funds AUM weightage remained flat at 62% as that of the previous month.

Liquid Funds

Liquid funds recorded highest outflow for the third consecutive month at Rs 516 crore in February 2010 as against outflow of Rs 10218 crore in January 2010. Liquid funds also witnessed highest redemption of Rs 4.93 lakh crore as against outflow of Rs 5.57 lakh crore in January 2010. The total asset increased by 2.14% to Rs 73030 crore in February 2010 compared to 10.74% fall in January 2010. 

Gilt Funds
It was only the AUM of gilt funds that witnessed fall of 5.65% Rs 3171 crore in February 2010 from Rs 3361 crore in January 2010. Gilt funds had net outflow of Rs 185 crore and redemption of Rs 261 crore for the month under review. The rising yields and uncertainity in the g-sec market led a fall in the gilt funds. The yields on 10-year Government Stock, 6.35% GS 2020, jumped 27 bps to 7.86% in February 2010, compared to 9 bps fall in January 2010. The yield increased incessantly in the first half of February 2010 to touch 16 months high of 7.89% with the concerns about fiscal deficit and government borrowing for next fiscal. 

Other Funds
ELSS-Equity Funds witnessed net inflow of Rs 335 crore registering 1.07% rise in its total assets. Gold ETFs registered net inflow of Rs 118 crore and its total AUM recording the highest growth of 11.09% to Rs 1583 crore during the month under review. The total AUM of other ETFs also increased by 6.34% in February 2010. Moreover the Fund of Funds and balanced funds that recorded fall in their asset base last month witnessed 2.93% and 0.05% rise in February 2010 respectively. 

Mutual Funds were net sellers of equity worth Rs 697.20 crore and net buyers in debt worth Rs 11973.70 crore in the month of February 2010.
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