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Q3 sees MFs’ best show since Sept 2010; AUMs rise 8.4% – The Economic Times

MUMBAI: Investors are back putting money in mutual funds. Assets under management of fund houses rose 8.4% to a 13-quarter high with equity assets rising 5% to the highest quarterly increase since September 2010. The growth driven by inflows into liquid funds , fixed maturity plans (FMPs) as well as equity funds which attracted investors despite profit-booking and volatility , said a Crisil report. “In the past quarter, we witnessed good participation from corporates, banks and HNIs in the fixed income products. Many retail investors, too, were drawn to debt products, some of them moving from equity to debt,” said Jaideep Bhattacharya, MD, Baroda Pioneer AMC. “Investors who had come in during 2006-07 used the opportunity of a rising Sensex to restructure their portfolio with a bias towards debt,” he said. Buoyed by good liquidity and RBI’s decision to roll back tightening measures, assets of money market funds grew as much as 35%, marking the highest rise since March 2011 quarter. The central bank had tightened liquidity in the banking system in July-August 2013 to arrest the rupee’s slide. Assets of FMPs closed at a new high with investors, hoping to gain from rising bond yields, lapped up closed ended schemes. Crisil said yields on the one-year commercial paper and certificate of deposit traded at 9.92% and 9.28%, respectively on December 31, 2013, up significantly from 8.76% and 8.15% at the end of June 2013. But thanks to a volatile rate, debt funds’ (long- and short-term) assets fell Rs 17,900 crore while gilt funds assets dipped Rs 700 crore. The share of ‘direct plans’, which was allowed by the capital market regulator in early 2013, increased to 30% of the industry’s assets under management compared to 26% in the previous quarter. Mutual funds average assets under management jumped Rs 68,200 crore to Rs 8.77 lakh crore in the quarter ended December ’13, according to data released by Amfi. In 2013, the industry’s assets grew 11%, or Rs 90,000 crore, against 15% in 2012.
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