HDFC MF pips ICICI Prudential to become India's top asset manager

HDFC MF clocked a net profit of Rs 722 crore in 2017-18, 31 per cent higher than the Rs 550 crore clocked in the last fiscal year

HDFC Mutual Fund has overtaken ICICI Prudential MF to become the country’s largest asset manager, after trailing the latter for more than two years. 

HDFC MF’s average of assets under management (AUM) stood at Rs 3.35 trillion for the quarter ended December, a rise of 9.3 per cent over the previous three-month period. Those of ICICI Prudential MF, on the other hand, slipped nearly one per cent to Rs 3.08 trillion, shows data from the Association of Mutual Funds in India.  ICICI Pru had overtaken HDFC MF — which had occupied the top slot since October 2011 — in the quarter ending March 2016. 

HDFC MF's net profit was Rs 722 crore in 2017-18, nearly a third more than the Rs 550 crore in 2016-17. ICICI Prudential MF's saw a 30 per cent rise to Rs 625 crore over the same period. 

“HDFC MF has, by and large, remained immune to the debt issues faced by the industry in recent months. That seems to have helped the fund house,” said Vidya Bala, head of MF research at FundsIndia.

SBI MF is another fund house which has climbed one place, to occupy the number three slot. Its assets rose 4.1 per cent to Rs 2.64 trillion in the quarter ended December. 

“SBI has seen steady growth on the equity side, with its flagship funds doing well over the past few years. Beside, its large banking network and inflow of retail (small depositor) money has boosted asset growth,” said Bala. 

Most of the top 10 fund houses saw a quarterly fall in AUM. Assets of DSP MF and Axis MF fell the most, at 17 per cent and seven per cent, respectively. Experts largely attribute this to risk-aversion triggered by the IL&FS crisis and the resulting hit on debt AUMs. In October, for instance, investors had pulled out money parked in liquid schemes, amid fear of contagion risk from the IL&FS issues. Debt schemes primarily attract short-term institutional money. 

MFs have benefited from a shift to financial assets, from physical assets like real estate and gold. Inflow through monthly Systematic Invest-ment Plans have averaged Rs 4,000-7,000 crore in the past year.

“An equity investment culture is rising and taking a more formal form. Most new-age investors are professionals, earning a livelihood in other industries; stock markets are simply a vehicle for their savings. Given the lack of expertise, resources and time, these investors are investing through insurance schemes and MFs,” goes a note by foreign brokerage Jefferies. 

The aggregate net profit in FY18 for 34 fund houses grew 40 per cent over FY17, data from Value Research shows.