After losing for two consecutive months, the assets under management (AUM) of the mutual fund industry rose 3.4 per cent, or R22,114 crore, in August to touch R689,542 crore on the back of institutional inflows into liquid funds.
"While there was an outflow of money from equity schemes, there was a positive flow by institutions into liquid funds due to a rise in interest rates and government spending," said the head of a large fund house on the condition of anonymity.
According to the data released by the Association of Mutual Funds of India (AMFI) HDFC Mutual Fund was the biggest gainer, which saw its AUM rise by R5,550 crore to R90,178 crore in August.
Franklin Templeton and Birla Sun Life were the next big gainers during the month in terms of absolute numbers.
LIC, Deutsche and Kotak Mahindra mutual funds were the biggest losers in terms of AUM during the month.
While the AUM for the industry stood at R805,239 crore in May, it lost R127,623 crore in as a result of huge outflow resulting from 3G auction and advance tax payments.
The industry, however, is still anxious about getting inflow in equity funds, especially from retail investors. The industry has witnessed a decline in the number of folios in equity and balanced funds and till July 2010, the number of folios in the two has come down by 463,465 since April 2010.