Strong inflows into debt funds helped Indian mutual funds clock a growth of 10% in their asset base in January. The fund industry added over Rs 64,000 crore during the month, taking its overall asset base to Rs 6,91,080 crore, according to data released by the Association of Mutual Funds in India (Amfi).
Almost all fund categories witnessed inflows during the month. Liquid funds and income funds netted about Rs 73,000 crore and Rs 10,000 crore in January, making them the largest contributors to industry asset base. Equity funds saw a net inflow of Rs 881 crore.
However, the 10% fall in the market in January caused a shrinkage in the asset base of equity funds. At the end of January this year, 39 fund houses had over Rs 1,65,000 crore in equity assets.
"Money is trickling in to equity funds," said Vikaas Sachdeva, CEO, Edelweiss Mutual Fund. "We are seeing a gradual rise in the number of SIPs. Debt funds are seeing an increase in allocations because of higher yields," Mr Sachdeva said. The sliding market in January presented a great opportunity for mutual funds to buy stocks at lower levels. Funds net bought shares worth Rs 864 crore and debt papers worth Rs 37,427 crore in January, according to figures released by market regulator Sebi.
"Significant sums of money have flown into fixed maturity plans and ultra-short term funds in January," said Vijai Mantri, CEO, Pramerica Asset Management.
Corporate treasuries, banks and even retail investors are investing in medium-term debt funds, thanks to rising yields. Rates on one-year paper are currently hovering at 10.25-10.50%. The yield on three-five year papers average 9.5-9.75%. Five-ten-year government papers earn anywhere between 8% and 8.5% as yields. A mediumterm debt portfolio will earn the investor about 30% return in three years time.
"We expect the industry to see more inflows in the months to come," Mr Mantri said. Balanced funds, equity-linked savings schemes and gold ETFs have logged inflows worth Rs 251 crore, Rs 245 crore and Rs 125 crore, respectively, in January.
Source: http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/strong-inflows-into-debt-funds-lift-mfs-asset-base-10-in-january/articleshow/7457543.cms
Almost all fund categories witnessed inflows during the month. Liquid funds and income funds netted about Rs 73,000 crore and Rs 10,000 crore in January, making them the largest contributors to industry asset base. Equity funds saw a net inflow of Rs 881 crore.
However, the 10% fall in the market in January caused a shrinkage in the asset base of equity funds. At the end of January this year, 39 fund houses had over Rs 1,65,000 crore in equity assets.
"Money is trickling in to equity funds," said Vikaas Sachdeva, CEO, Edelweiss Mutual Fund. "We are seeing a gradual rise in the number of SIPs. Debt funds are seeing an increase in allocations because of higher yields," Mr Sachdeva said. The sliding market in January presented a great opportunity for mutual funds to buy stocks at lower levels. Funds net bought shares worth Rs 864 crore and debt papers worth Rs 37,427 crore in January, according to figures released by market regulator Sebi.
"Significant sums of money have flown into fixed maturity plans and ultra-short term funds in January," said Vijai Mantri, CEO, Pramerica Asset Management.
Corporate treasuries, banks and even retail investors are investing in medium-term debt funds, thanks to rising yields. Rates on one-year paper are currently hovering at 10.25-10.50%. The yield on three-five year papers average 9.5-9.75%. Five-ten-year government papers earn anywhere between 8% and 8.5% as yields. A mediumterm debt portfolio will earn the investor about 30% return in three years time.
"We expect the industry to see more inflows in the months to come," Mr Mantri said. Balanced funds, equity-linked savings schemes and gold ETFs have logged inflows worth Rs 251 crore, Rs 245 crore and Rs 125 crore, respectively, in January.
Source: http://economictimes.indiatimes.com/personal-finance/mutual-funds/mf-news/strong-inflows-into-debt-funds-lift-mfs-asset-base-10-in-january/articleshow/7457543.cms
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