The July-September quarter has turned out to be a money spinner for domestic mutual funds.
Average assets under management (AUM) of 44 mutual funds increased by 7.9 per cent on quarter or Rs 545 billion to Rs 7.47 trillion in the quarter ended September 30, according to latest data by Association of Mutual Funds in India (AMFI).
In the preceding quarter, AUM stood at Rs 6.93 trillion. The rise in average AUM in July-September quarter in absolute as well as in percentage terms was the highest in the last two years.
According to industry experts, the rise in the average AUM was primarily due to inflows into income funds, ultra short term debt funds and money market mutual funds.
The rise in assets was on account of inflows due to improvement in liquidity situation following Reserve Bank of India’s decision to cut statutory liquidity ratio (SLR) and cash reserve ratio (CRR) during the quarter.
On the returns front, short term debt funds gave the highest annualised returns of 10.68 per cent, followed by ultra short term debt funds (8.92 per cent) and money market funds (8.68 per cent) in quarter under review.
Equity mutual funds’ average AUM rose by 2 per cent or Rs 33 billion to Rs 2.02 trillion in the quarter.
The rise in the category assets under management, which constitutes 27 per cent of total assets, was primarily due to positive sentiments prevailing for the asset class.
Domestic equity markets, represented by the S&P CNX Nifty, rose by 8 per cent in the quarter amid optimistic domestic and global cues.
However, growth in equity assets was capped by profit booking.
Gold exchange traded fund’s (ETF’s) AUM rose 5 per cent or by Rs 5 billion to Rs 106 billion during the quarter due to rise in gold prices.