Large MF houses see greater fund inflow: Crisil

Large mutual fund houses have seen a greater inflow of funds in the month of February, amid the MF industry witnessing a rise in their assets under management for the third consecutive month, Crisil says.

"Size appears to be a key factor determining choice, with large fund houses recording higher net inflows compared to the relatively small ones, a number of which have seen lower inflows, if not net outflows," the credit rating agency said.

In total, MF industry received net inflows of Rs 34,000 crore in February, against Rs 66,800 crore in January 2009.
 
Income funds received the largest share of net inflows (Rs 19,900 crore), followed by liquid funds (Rs 14,900 crore).

"With equity markets still volatile, and the economic climate uncertain, the average assets under management (AAUM) growth currently is driven mainly by debt and liquid funds. Corporate bond yields fell in February 2009 and in such an environment, debt funds held an edge with respect to returns," Crisil FundServices Head Krishnan Sitaraman said.

The AUM of the country's MF industry regained the Rs 5,00,000-crore mark at the end of February, growing 8.8 per cent or by Rs 40,000 crore month-on-month, buoyed mainly by inflow in fixed income plans.

"The top three fund houses, which recorded the highest increase in absolute AAUM over January and February have a large number of funds which fall in the Crisil-CPR 1 (very good) and Crisil- CPR 2 (good) ranking clusters and are large in size," Sitaraman added.

Of the 35 fund houses in the country, Crisil said, Birla Sun Life MF, ICICI Prudential MF and Reliance Capital MF come in the category of Crisil-CPR 1 to Crisil- CPR 2.
 
At the end of February Gilt Funds witnessed a Rs 500 crore net outflow, for the first time since November last year.

The share of debt funds (income, gilt and liquid) in the Indian MF universe has risen from 62 per cent a year ago (February 2008) to 77 per cent in February 2009 indicating a shift in investor preference towards debt funds due to the change in market dynamics, Crisil said.