Fund assets Rs 2,000 cr less in Aug

Despite a slew of initial public offers (IPOs) from mutual fund houses, the mutual fund industry had a tough time in August with assets under management (AUM) seeing a fall of over Rs 2,000 crore month-on-month. The volatile equity market and the downturn in the debt markets did not help the mutual fund industry, struggling in vain to retain assets in the last month.

The total assets under management fell by Rs 2,047 crore to Rs 1,55,283 crore on August 31 from an AUM of Rs 1,57,330 crore on July 31 as per data computed for 25 mutual funds.

August saw as many as 14 out of 25 mutual fund houses reporting losses in net AUM.

Out of the 11 that showed net gains, only five showed a triple digit net accretion in AUM. Tata Mutual Fund emerged as the largest gainer among all mutual funds during the last month, with a net gain of Rs. 816 crore, resulting in a net AUM of Rs 6,298 crore on August 31. Industry sources partly attributed the gains to its IPO in a floater scheme during the month. Franklin Templeton was the second largest gainer with an increase of Rs 633 in its net assets to Rs 18,332 crore despite the fund launching no IPO.

Standard Chartered Mutual Fund added Rs 187 crore to its AUM and Reliance Mutual Fund added Rs 150 crore to have a net AUM of Rs 11,570 crore, but it garnered funds from its Floater IPO, said marketmen.

Among the biggest losers were the UTI mutual fund with a loss of nearly Rs 1,400 crore (6.38 per cent) in AUM, SBI mutual fund with a net loss in AUM of Rs 551 crore (8.93 per cent) and DSP Merrill Lynch mutual fund, whose net AUM fell by Rs 430 crore (6.80 per cent).

A senior fund manager at UTI mutual fund said," The equity market has risen considerably and profit booking was seen, considering that we have almost 48 per cent of AUM invested in equity."

He added that UTI mutual fund also paid out dividends and no new funds were launched in August.

Ravi Mehrotra, president, India, Franklin Templeton AMC, said," We have witnessed inflows into our equity, fund of funds and floating rate funds during the month, which reflects the changing investor needs in current market conditions. We have seen increased inflows into our flagship equity funds given our focused efforts to promote Systematic Investments (through SIPs) as well as reasonably attractive equity valuations. On the other hand, the uncertainty in the debt markets owing to the interest rate outlook has resulted in a shift in allocations towards floating rate and liquid funds, as investors look for a hedge during volatile times."