MF assets dip R10,948 cr

Liquidity pressure in the market continued to hit the assets under management (AUM) of the mutual fund industry, which dropped by Rs 10,948 crore or 1.6 per cent in July, after witnessing an outflow of Rs 127,624 crore in June on account of the 3G auction and advance tax payments. HT reports.

Liquidity pressure in the market continued to hit the assets under management (AUM) of the mutual fund industry, which dropped by Rs 10,948 crore or 1.6 per cent in July, after witnessing an outflow of Rs 127,624 crore in June on account of the 3G auction and advance tax payments.

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The average AUM of the mutual fund industry stood at Rs 666,667 crore in July.

"The liquidity situation is tight, which is resulting in negative fund inflow for the mutual fund industry," said the chief investment officer of a foreign fund house.

Even as the benchmark Sensex touched 18,000 in July, fund flows have not been in line with market movement.

Fund houses claim that retail investors have started to invest.

"There has been a rise in new accounts for systematic investment plans but it will take a couple of months to reflect in terms of numbers," said a senior official at another fund house.

LIC Mutual Fund, which lost Rs 5,624 crore and IDFC Mutual Fund, which lost Rs 5,079 crore, were the biggest losers for the month. SBI Mutual Fund and JP Morgan AMC were the biggest gainers.

Among the top five players, only Reliance Mutual Fund witnessed some growth in its AUM during the month, while others witnessed outflows.