15 October 2011

India Strategy DMF Flows (September-11): Another Month of Equity Inflows ::Morgan Stanley Research,

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India Strategy
DMF Flows (September-11):
Another Month of Equity
Inflows
Equity funds report inflows while fixed income
funds report outflows: During September, equity
funds reported inflows (of Rs15bn) for the second
successive month. Year-to-date, equity fund flows have
been positive in 6 out of nine months. Fixed income
funds, on the other hand, reported outflows (at
Rs564bn). Flows in liquid and income funds continued to
be negative (at Rs411bn and Rs153bn) during the
month. On the aggregate, domestic mutual funds
experienced outflows (at Rs549bn) for second month
running. At the end of September, the industry assets
stood at US$135bn, down 12.3% MoM.
Equity funds: In 2011 thus far, inflows in equity funds
have aggregated to Rs77bn as compared with outflows
of Rs136bn for the same period in 2010. By end of the
month, the equity assets under management declined
5.2% MoM – at US$39bn – lowest level since July-09.
The share of domestic equity assets to market cap rose
to a 13-month high at 3.2%.
Fixed-income funds: In 2011 thus far, inflows in fixed
income funds aggregated to Rs261bn as compared with
outflows of Rs462bn for the same period in 2010. During
2011, liquid funds reported inflows of Rs299bn while
income funds reported outflows of Rs38bn, respectively.
By end of month, fixed income assets fell to a 6-month
low at US$96 billion – down 15% MoM.
Monthly Fund Tracker: Assets of gold funds made
another high at Rs82bn in September. In 2011, AUM for
liquid and gold funds is up 45% and 132%, respectively.
Sector Trends: SEBI data suggests (till August) that
since the start of 2011, AUMs for Consumer Staples and
Telecoms have risen the most while they have fallen the
most for Industrials. During August, AUMs for Energy
rose the most while Financials saw the biggest fall.

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