Mutual Funds (MFs) have recorded mobilisations of Rs 252.1 bn over the period April-October 1999, up 105% over the same period last year. This was revealed by figures released by AMFI in a leading financial daily.

Higher mobilisations are attributed to the tax breaks offered in the last budget, buoyant stock market, aggressive marketing of MFs and launching of various innovative schemes targeted at different investors.

Over the period April-October 1999, net inflows have been very encouraging at Rs 87.8 bn. In FY99, there was net outflow of Rs 9.5 bn, which indicates that a larger quantum of funds were pulled out of MFs.

The scenario transformed dramatically in the current financial year, and the starting point was undoubtedly the tax sops offered in the last Union Budget. The dramatic rise in the prices of software scrips, coupled with the revival in the economy saw an overall feel-good factor prevailing in the stock markets. As prices of most quality stocks were beyond the reach of the retail investors, they flocked to MFs in a big way to cash in on the euphoria in the stock markets.

MFs did not want to be left behind and they launched innovative products (sectoral funds, balanced funds, gilt funds) which fuelled demand even further. In FY2000, so far, 42 schemes have already been launched.

Private sector MFs have been quicker to capitalise on this frenzy than their public sector counterparts. Private funds have witnessed net inflows of Rs 60.7 bn over the period April-October 1999. Compare this to net outflow of Rs 7.9 bn that public funds have witnessed in the same period.

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