MF assets rise 3.7 per cent in Q1, equity outflow continues

Average assets under management (AUM) of the mutual fund industry rose 3.7 per cent to a record high of Rs 8.47 lakh crore in the April-June quarter, making it the fifth consecutive quarterly rise.

The AUM of the previous quarter was at Rs 8.17 lakh crore for the industry.

According to a Crisil report: "The rise was led by heavy inflows into debt mutual funds on the back of interest rate cuts by the Reserve Bank."

According to the report, assets under debt and gilt funds saw a rise on strong inflows on the back of expectation of easing interest rate cycle in the coming months.

While assets of long-term debt funds rose 31 per cent to Rs 1.12 lakh crore, gilt funds rose by 10 per cent to Rs 8,600 crore in the quarter.

Similarly, AUMs of short-term debt and ultra short term debt funds also rose on the back of improvement in the banking system's liquidity in the first quarter of this fiscal.

While assets in short-term debt funds rose to Rs 72,800 crore in the June quarter, ultra short-term category's AUM gained by Rs 5,600 crore to Rs 1.05 lakh crore during this period.

However, equity funds' assets saw the highest fall in the past six quarters, with AUM falling for the sixth straight quarter - around 5 per cent to Rs 1.99 lakh crore - led by heavy outflows despite mark-to-market gains seen during the quarter.

Meanwhile, average AUM of gold ETF saw a record fall of around 11 per cent to Rs 10,600 crore in the June quarter.