5 mutuals post net increase in AUM

Reliance Capital is the top gainer in March followed by UTI Mutual Fund

As many as five mutual fund houses have reported a net increase in assets under management (AUM) in March 2004, according to data available from mutualfundsindia.com.

Traditionally March is s difficult month for fund houses as corporate investors "" which contribute to the largest chunk of mutual fund corpuses "" pull out their money to clean up their books ahead of the financial year end and balance sheet preparation.

Reliance Capital Mutual Fund emerged as the largest gainer in March, with a net addition of Rs 878.02 crore over the levels at the end of February.

It was followed by UTI Mutual Fund with a Rs 846.4 crore accretion. HSBC Mutual Fund and Tata Mutual Fund also posted gains in the last month of fiscal 2003-04, with their corpus increasing by Rs 551.74 crore and Rs 237.96 crore, respectively.

Kotak Mahindra Mutual Fund added Rs 60.76 crore to its assets under management in March.

Market sources indicate that Reliance Mutual Fund benefitted due to a bonus issue, while other fund houses saw increased inflows on the back of new fund scheme launches through initial public offers.

HSBC Mutual listed two new fund schemes, the HSBC Opportunities Fund and the HSBC MIP, while Tata Mutual launched and listed the Tata MIP Plus.

Among the top losers in the month, large fund houses such as Prudential ICICI lost Rs 1,557.71 crore in AUM, Franklin Templeton Investment's assets under management was Rs 526.92 crore lower, HDFC Mutual Fund saw outflows of Rs 452.24 crore and Birla Mutual Fund saw a Rs 444.92 crore fall in its assets under management .

Analysts attribute these losses to the inability of fund houses to stem losses arising from corporate redemptions in March with matching or greater inflows into new and existing schemes.

This is true of equity schemes, which saw fresh inflows in the last few months, while debt schemes witnessed major outflows due to indifferent performance.

That is perhaps the reason why a debt-focussed fund house such as Standard Chartered has seen net outflows of Rs 924.22 crore.

Industry observers point out that the new fiscal will see fresh inflows for mutual funds as corporates return to the mutual fund fold to park their surpluses.