Average assets under management (AUM) for mutual fund industry grew by almost 5 per cent in May to reach Rs 5,99,079 crore. The top five fund houses that added to their AUM figure, contributed to more than half of industry’s gain. This gets reflected in average AUM figure for fund houses, compiled by Association of Mutual Funds in India (AMFI) for the month of May.
AUM growth for the mutual fund industry gains prominence when looked from the perspective that Sensex lost 5 per cent during the one month period from April 30 to May 30. While equities has remained volatile, the current economic scenario of rising inflation suggests a rise in interest rates going ahead.
This makes short-term debt funds an attractive investment option, experts say. “Growth in equity is there but not as much as earlier,” said Vikrant Gugnani, CEO, Reliance Capital Asset Management. “There has been significant growth in the number of fixed maturity plan investors.”
The rise in AUM even in volatile period shows investor confidence in mutual funds. “Compared to sub 0.5 per cent of the household saving invested in mutual fund in 2003-04, it has gone up to nearly 5 per cent now and we have seen inflows instead of outflows during the volatile times,” said Nilesh Shah, deputy-managing director, ICICI Prudential AMC.
Retail investors find mutual funds a preferred equity investment route, “Most investors are not going directly for equity investment but are taking mutual fund route,” said Gugnani.