Debt funds offer higher returns in November

The debt funds have been under Sebi s lens in the recent past. But, interestingly, they have offered the highest returns to the investors in November, 2008. The monthly returns of the gilt funds were the highest at 3.07% followed by the long-term bond funds and liquid funds. However, the returns from the equity funds were negative due to the meltdown in the equity market, Crisil research report on MF industry for November found. According to Crisil s monthly review on the mutual fund industry, the open-ended income funds and liquid funds were the key beneficiaries with the former seeing net inflows of almost Rs 190 billion while the close ended income schemes (fixed maturity plans) saw a net outflows of a similar number. The AUMs of liquid funds increased by Rs 175 billion, a growth of 25 per cent over the October-end. The decline in the equity AUM of around Rs 70 billion was largely on account of mark-to-market losses. The share of debt funds AUMs in the domestic mutual fund continued to rise in 2008 from 61 per cent in January, 2008 to 71 per cent in November, 2008. Of the 35 mutual fund houses analysed, only two saw a growth in average AUM in November 2008. Tata MF registered 3 per cent and UTI MF witnessed a marginal growth in its AUM in November. With regard to the regulatory initiatives, Crisil report said that RBI has taken several initiatives to enhance the liquidity into the system. Sebi has sealed an early exit route in the closed ended mutual fund schemes and made it mandatory for the close ended schemes to be listed at the bourses. Sebi also decided that for such close ended schemes, the underlying assets will not have a maturity beyond the scheme s expiry , the Crisil report said