Liquid Plus Plans Boost MF's Assets 21Pc In July

Bangalore: Immense inflows into liquid and liquid plus plans accelerated the asset growth of the domestic mutual fund industry in July. July-end, fund industry assets stood at Rs 4.866 trillion, up 21.41 per cent over June. In comparison, June assets declined by 3 per cent on massive erosion in liquid plans due to corporate advance tax payments and June-quarter corporate earnings. In June, cash plans assets fell by 21.35 per cent, while in July liquid funds registered nearly 49 per cent jump in assets. By July-end, assets under management of liquid plans stood at Rs 1.355 trillion. Liquid schemes attracted inflows as corporates normally park their surplus cash in these schemes, which offer 7.5-8 per cent annual returns instead of keeping the money idle in bank current accounts. Like cash plans, liquid plus funds also do not levy entry and exit load, thus facilitating easy cash management. The assets of income fund category increased by 22 per cent, mainly led by liquid plus plans and a few fixed maturity plans. In July, 17 FMPs collectively generated Rs 21.95 billion as compared with 30 such schemes collecting Rs 45.34 billion rupees in June. Gilt funds displayed slight asset rise as long-term bond yields softened and improved the returns of long-term schemes. Assets under management of tax-saving schemes and diversified equity funds increased by 5.04 per cent and 5.85 per cent, respectively, which was more or less in line with the stock market rise. Despite collections in new schemes, assets did not rise significantly, indicating a shift from existing schemes to new ones. SBI Infrastructure Fund-I, Tata SIP Fund-II, and Franklin High Growth Companies Fund collectively garnered Rs 38.90 billion in June, but units were allocated only in July, hence the reflection in July assets figure. The huge inflows in debt schemes pulled down the share of equity schemes to 30.15 per cent from 34.6 per cent in June.

Assets in this category declined by 1.63 per cent mainly due to a fall in assets of Benchmark Mutual Fund, which is the pioneer of exchange-traded funds in India. By July-end, assets of Benchmark Mutual fell to Rs 70.86 billion as compared with nearly Rs 72 billion in June. The assets of Benchmark Mutual's Banking BeES fell 1.56 per cent despite the 2.79 per cent rise in the CNX Bank Index. Reliance Mutual continued to top the assets league with Rs 664.20 billion assets. ICICI Prudential Mutual Fund and UTI Mutual Fund retained their second and third slots in assets under management tally. By July-end, assets of ICICI Prudential Mutual Fund and UTI Mutual Fund increased 11.64 per cent and 9.01 per cent to Rs 486.89 billion and Rs 425.48 billion, respectively. However, in terms of average assets, HDFC Mutual was at the third position with assets of Rs 410.41 billion, followed by UTI Mutual with Rs 401.14 billion.