MFs grow 9.4% despite slowdown | business | Hindustan Times
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MFs grow 9.4% despite slowdown

An improved liquidity situation and peaking interest rates saw more investors parking their money in debt and liquid funds in January, leading the mutual fund industry gain 9.4% in its total assets under management.

business Updated: Feb 03, 2009 21:02 IST
HT Correspondent

An improved liquidity situation and peaking interest rates saw more investors parking their money in debt and liquid funds in January, leading the mutual fund industry gain 9.4 per cent in its total assets under management.

The average assets under management (AUM) for the industry grew by Rs 39,791 crore and stood at Rs 4,61,698 crore.

LIC Mutual Fund and IDFC AMC were the top gainers with a rise in their assets under management of 30 per cent and 29 per cent, respectively.

As the equity markets continue to remain gloomy, investors put more money into the debt funds and liquid funds to gain from the reigning high interest rates that are in the process of correction.

“The entire industry groomed as the system got flush with liquidity with measures adopted by the Reserve Bank of India,” said Nilesh Shah, deputy managing director, ICICI Prudential AMC. “Both the debt funds and the liquid funds have witnessed a surge in cash flow.”

The top five players in the industry together gained a total of Rs 25,466 crore. Among the top five fund houses, Birla Sun Life AMC saw its AUM rise by 15.3 per cent followed by ICICI Prudential AMC, that grew by 13.5 per cent to become the number three player after it lost the position to UTI AMC in November.

While the debt funds have helped the industry to grow, the equity markets do not look to get back on track soon. Experts are of the opinion that it may take close to 12-18 months for the equity market to recover.