Money market schemes attract major chunk in MF inflows
Press Trust of India
Tuesday, May 19, 2009 (New Delhi)
Following the recovery in the stock markets, the country's mutual fund industry is likely to see a
change in allocation of funds by investors towards the equity schemes, even as money market
schemes continue to grab the lion's share.
\"The recovery visible in the equity market at present may lead to a change in the allocations of
investors' money towards the equity schemes. But the proportion of equity schemes in the total
fund mobilisation will continue to be very less compared to the money market schemes,\" SMC
Capitals equity head Jagannadham Thunuguntla said.
According to an analysis by SMC Capitals, out of the total mutual fund mobilisation around 80
per cent inflows are in the liquid or money market schemes, while equity schemes, which invest
in shares, get just 1-2 per cent of the flows.
Liquid or money market schemes generally invest in safer and short term instruments like
overnight inter-bank call money market. The call-money market allows banks, large corporation
and financial institutions to borrow and lend money at interbank rates over a very short period of
time of less than a week.
The Liquid Funds gained the major portion of the Total Mutual Fund mobilisation in the first
quarter of 2009 at 80.45 per cent, against just 0.28 per cent to equity schemes, the SMC
Capitals study said.