CRISIL’s mutual fund indices ended December 2007 on a positive note for the fourth month in a row. The equity category, represented by CRISIL Fund~eX, posted gains of 9.44 per cent, beating the S&P CNX Nifty, which closed at gains of 6.52 per cent. CRISIL Fund~bX, the index for balanced funds, posted returns of 7.24 per cent in December, while CRISIL MIPEX, the index for monthly income plans… had returns of 1.78 per cent. Among debt indices, CRISIL MF~Gilt (the gilt funds index) reported the highest returns (1.73 per cent), followed by CRISIL Fund~dX, the long-term bond funds index (1.02 per cent). CRISIL STBEX, the index for short-term bond funds, had returns of 0.71 per cent, while CRISIL~LX, the index for liquid funds, had returns of 0.67 per cent.

The overall assets under management (AUM) in India’s mutual funds industry closed 2007 at Rs.5.54 trillion, up 71 per cent over the December 2006 AUM of Rs.3.24 trillion. The December 2007 AUM grew marginally by 2 per cent (or Rs.123.8 billion) over that of November 2007. According to Mr. Krishnan Sitaraman, Head – Fund Services and Fixed Income Research, CRISIL FundServices, “The growth in the overall AUM in December was despite the advance tax outflows. The growth may be attributed to a combination of initial public offering (IPO) listings and new fund offers (NFOs), as well as inflows into debt funds.” Reliance Mutual Fund remains the largest fund house with an AUM of Rs.808 billion. UTI MF moved up one notch to second place, with an AUM of Rs.569 billion, while ICICI Prudential MF was at third spot, with an AUM of Rs.568 billion. Mutual funds were net buyers in the secondary equity market to the extent of Rs.30.24 billion in December.

Among mutual fund regulations announced in December, was Securities and Exchange Board of India’s (SEBI’s) release of draft norms on real estate investments trusts (REITs). The draft document proposes that schemes offered by REITs be close-ended, compulsorily listed, and rated. SEBI has waived entry loads on direct mutual fund investments with effect from January 4, 2008. It has also issued a draft proposal for a fast-track launch of mutual fund products. Further, with effect from February 1, investments of Rs.50,000 and more in mutual funds will need to comply with know-your-client (KYC) norms while PAN cards would be a must for all mutual fund investments from January 1.

Sourced From: CRISIL Limited

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