07/05/2015 12:27 PM IST | Updated 07/05/2015 12:28 PM IST

Mutual Fund Investments Touch New Highs In Growing India

FILE - In this March 5, 2009 file photo, the Supreme Court Building is seen in Washington. After hearing arguments Monday, Nov. 2, 2009, the Supreme Court must decide whether to adopt a new standard to determine when mutual fund fees are excessive. (AP Photo/J. Scott Applewhite, file)

NEW DELHI — Mutual funds are a safer bet than investing purely in equities, and more Indians are going for that. The total amount invested in MFs has grown 10 percent in the last one month alone, to a whopping Rs 11.86 lakh crore.

Mutual fund managers invest on their clients' behalf on a basket of products, to spread the risk. The mix of financial instruments depends on the investor's appetite for risk. For example, one mutual fund might invest more in equities than in debt, while another might invest entirely in debt and bonds.

This month's rise in investments have mostly been in funds that have invested more in equities. That makes sense, given that markets have generally been upbeat after Narendra Modi's win last year.

MFs' assets under management (AUM) hit a record Rs 12.02 lakh crore in February itself. Fund houses are upbeat about the industry's performance for the current fiscal (2015-16) as equity markets are expected to continue their momentum, making the segment attractive, industry insiders said.

The country's 44 fund houses together saw a growth of around 10 per cent in their asset base at Rs 11,86,364 crore at the end of April 2015, according to data released by the Association of Mutual Funds in India (Amfi) on Thursday.

The AUM stood at Rs 10,82,757 crore at the end of March 31, 2015. Market analysts attributed the growth in asset base to strong inflows in equity and 'liquid' or 'money market' segments. In April, money market or liquid segment saw an inflow of Rs 1.01 lakh crore while equity funds witnessed an inflow of Rs 10,406 crore.

(With agency inputs)

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