Indian mutual fund industry’s assets under management (AUM) hi an all time high of Rs. 8.68 lakh crore in May, 2013 as prospects of faster interest rate cuts by the Reserve Bank of India (RBI) spurred investors into buying debt schemes.
Equity schemes, which constitute a very profitable segment for the sector, continued to languish with redemptions scaling an 8 month high of. Rs. 2,910 crore following a lacklustre performance from the BSE Sensex.
The MF industrys month-end assets under management (AUM) rose Rs. 42,900 crore,or 5 %,month-on-month in May, 2013 numbers released by the Association of Mutual Funds of India (AMFI) show.
Assets of income funds (including long-term debt funds, short-term debt funds, fixed maturity plans - FMPs) rose by nearly Rs. 25,000 crore,or 6 %,to a threeyear high of Rs. 4.47 lakh crore. Most of the inflows were into short- term & ultra shortterm debt funds.
Assets of liquid funds (includes ultra shortterm debt funds) also rose by Rs. 21,700 crore to a 25 month high of Rs. 2.06 lakh crore. Improved liquidity in the banking system also supported the inflows. The long and intermediary bonds funds posted 3 % absolute return in May, 2013 its biggest monthly return in 4 years, on expectations of interest rate cut by RBI. Thus,that has propelled money into debt funds.
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