Mutual fund assets at record level in February

Assets under management of the Indian mutual fund industry increased 1.45%, or by Rs 131 bn, in February to a record Rs 9.16 trillion, according to the monthly numbers released by the Association of Mutual Funds in India. The spurt was primarily due to inflows into income and equity-oriented funds. On the other hand, liquid funds saw outflows, which eroded higher gains for the industry assets.

Income funds (long-term, short-term and ultra short-term debt funds; and fixed maturity plans or FMPs) logged inflows of Rs 129.6 bn – the highest since May 2013.

Equity funds (including ELSS funds) recorded inflows for the fourth consecutive month in February at Rs 5.82 bn, higher than Rs 4.27 bn in January. The category’s assets rose 3.3%, helped by inflows and mark-to-market gains. The benchmark CNX Nifty gained 3% on-month on positive domestic cues.

Fund of funds investing overseas saw inflows for the ninth consecutive month in February. The category has caught investors’ attention as improving prospects of developed economies and a soft rupee has shored up returns.

Investors continued to exit gold exchange traded funds (ETFs) for the ninth consecutive month in February amid weak sentiment for the underlying asset class. The latest month saw outflows of Rs 1.78 bn compared with Rs 1.65 bn in the previous month.