Thursday, August 8, 2013

MF COMPANIES FACE OUTFLOW OF FUNDS

Assets under management (AUM) of the mutual fund (MF) industry declined by over 6 per cent to stand at Rs 7.61 lakh crore in July due to heavy redemption from liquid funds, a Crisil report said today. As per the rating agency, AUMs of liquid funds dipped 21 per cent to Rs 1.29 lakh crore, primarily due to outflows of Rs 45,300 crore after the recent liquidity tightening measures announced by the Reserve Bank.
To stem the rupee volatility by curbing speculation, RBI last month came out with a slew of liquidity tightening measures. The agency noted that the industry has witnessed rare outflows in the first month of the September quarter which usually happens towards the end of the quarter.
Meanwhile, the AUMs of both equity and debt funds also declined during last month. Equity funds' AUMs fell 4.4 per cent to Rs 1.63 lakh crore in July led by outflows as well as mark to market (MTM) losses. Similarly, within debt category, income funds' assets fell over 2 per cent to Rs 4.32 lakh crore, while Gilt fund AUMs declined 3 per cent to Rs 8,200 crore last month on the back of recent rise in bond yields. However, the report noted that there was renewed interest in fixed maturity plans (FMPs) with 37 new launches in this category. "Rise in FMP launches was an outcome of the recent rise in bond yields," it said. Gold ETFs, which have seen bit of pressure due to fall in gold prices in the recent past, reported the highest rise of 11 per cent in AUM to touch Rs 10,700 crore since October 2011 on the back of MTM gain as the underlying asset prices rose 12 per cent in the month tracking positive global trend. The AUM under fund of funds category rose by 9 per cent to Rs 2,100 crore during July with marginal inflows of Rs 29 crore to this category. 

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