The mutual fund industry's assets under management touched a new peak at the end of July, crossing the Rs 7 lakh crore (Rs 7 trillion) mark for the first time ever.
Riding on the back of fresh inflows into various schemes, the MF industry's AUM totalled Rs 7.20 lakh crore (Rs 7.2 trillion) -- a 24 per cent rise over the previous month, Crisil FundServices said in a report.
"Income and liquid funds saw strong inflows in July, with banks again parking money in mutual funds after withdrawals in June end to meet quarter-end capital adequacy related requirements," Crisil FundServices director Krishnan Sitaraman said.
Also, the more than eight per cent rise in country's stock market barometer Sensex, on the back of strong foreign fund flows and renewed investor confidence, during July, helped up the AUMs of all the fund houses.
"The positive market momentum saw continued interest in equity funds," Sitaraman said.
During July, FIIs invested over Rs 11,600 crore (Rs 116 billion) in Indian equities, while MFs bought Rs 1,825 crore (Rs 18.25 billion) shares, as per data available on the website of Securities and Exchange Board of India.
At the end of July, investors poured in funds worth Rs 1,23,679 crore (Rs 1,236.79 billion) in all the 36-fund houses of the country, recording the second biggest inflow in the fiscal 2009-10.
At the end of April, the MF industry had seen inflows worth Rs 1,54,192 crore (Rs 1,541.92 billion) in various schemes.
The MF industry has witnessed outflows worth Rs 83,937 crore (Rs 839.37 billion) in June after two consecutive months of inflows, which analysts believe was mainly on the back of heavy pull out by banks.
"A key feature in this trend is that the months following the quarter ending (March and June) have seen large inflows, which indicate that outflows witnessed were of a very short term nature," Crisil said.
Crisil FundServices is India's leading provider of fund evaluation and research to the Indian Mutual Fund industry.
During July, fixed income plans with assured returns saw a maximum investment of Rs 95,764 crore (Rs 957.64 billion), followed by liquid or money market funds with higher liquidity and short maturity period which saw inflows worth Rs 24,698 crore (Rs 246.98 billion).
Besides, equity funds investing in stocks attracted investments worth Rs 4,232 crore (Rs 42.32 billion).
Analysts feel that as increasing number of fund houses flooded the counter with new fund offers before the implementation of entry load ban from August 1, inflows increased substantially during the month.
