NEW DELHI, Dec 28: After two consecutive years of plunge, the mutual fund industry managed to register a smart turnover in 2012, with its assets base seen nearing Rs 8 trillion with an increase of about Rs two trillion this year.
As some wide-ranging reforms initiated by the market regulator Sebi and the government are yet to translate into true business gains for the investors and fund houses, the industry is hopeful of even better days ahead in 2013.
The total assets under management (AUM) of all the fund houses put together has soared by an impressive 30 per cent on strong inflows in categories such as fixed income, gold schemes and liquid funds, the industry estimates show.
The total industry AUM stood at Rs 6.11 lakh crore at the end of 2011, while the same was about Rs 6.26 lakh crore at 2010-end and Rs 6.65 lakh crore in 2009.
The mutual funds collect money from investors and later invest the same into various market segments including stocks, IPOs (primary market) and bonds.
Industry expects net inflow into mutual funds to further pick-up in 2013 as the government and Sebi have expressed their intention to revive equity culture in the country and help channelise the household income into stocks, mutual funds and insurance sectors, rather than in idle assets like gold.
“The current market conditions and wide-ranging reforms announced by Sebi to re-energise the mutual funds industry would help the sector to channelise funds in the equity market,” Sudip Bandhopadhyay MD and CEO at Destimoney Securities said.
He also said that stock market and mutual funds stand to attract more investments from Rajiv Gandhi Equity Savings Scheme, after some initial hiccups.
“We have seen the AUMs increase largely in fixed income and gold schemes,” Quantum AMC CEO Jimmy A Patel said.
Birla Sun Life Asset Management Company CEO A Balasubramanian said: “In 2012, the mutual fund witnessed growth in fixed income schemes. Within fixed income schemes, actively managed duration focused funds got inflows.
“In other words, debt funds attracted inflows due to stable to benign interest rate regime. Overnight rates more or less remained above the Repo rate. As a result of this, most of the fixed income schemes including money market mutual fund schemes generated higher returns than Bank fixed deposit return,” he added.
Inflows in income and liquid funds have contributed the most to the industry’s rising AUM. With inflows of Rs 89,302 crore, money market funds AUM surged to Rs 1.77 lakh crore. A similar trend was seen in liquid funds, where inflows rose to Rs 80,880 crore taking the assets managed by the fund to Rs 3.87 lakh crore. (PTI)
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