Funds lag Sensex in rebound

The market has recovered from the May mayhem in the last couple of months, but it seems that a few fund houses have been slow in catching up with the rebound witnessed since June.

The highest level that Sensex "� the market barometer "� touched in March was 11307, while the peak it scaled in September was 12454, indicating a net gain of more than 1100 points.

The BSE 100, the index that predominantly represents mid-cap scrips, has also moved up to 6328 in September from 5904 in March, rising over 400 points.

The total assets under management (AUM) of the mutual fund industry increased from Rs 2.3 lakh crore at the end of March to nearly Rs 3 lakh crore by the end of September. However, the equity assets of a few fund houses actually declined during the period.

Some fund houses reported gains, but experts felt that it was largely because of new fund offerings (NFOs). Equity-oriented NFOs mopped up close to Rs 13,400 crore during the period.

Four fund houses "� Sahara, Escorts, Morgan Stanley and Birla Sun Life "� reported negative growth.

HSBC MF just about managed to maintain its numbers in the positive growth track.

The AUM of UTI MF, Reliance MF, Franklin Templeton and Fidelity improved, but the pure equity portfolio of these major fund houses actually declined during this period.

A Balasubramanian, chief investment officer of Birla Sun Life, said the fall was on account of the fact that a lot of monthly plans matured during June and September, and some of the redemption money flowed out of the system into banks. "There is also a drastic fall in the value of investment in May, but we are catching up," he said.

Value Research Chief Executive Dhirendra Kumar said some mutual fund houses were slow to react to the stock market turnaround since June.

Sanjay Sinha, head of equity at SBI MF, felt that high dividend payout did come in the way of expanding the AUM.

While the AUM of Escort declined 28 per cent from Rs 163 crore to Rs 118 crore during the period under review, Sahara MF experienced 19 per cent decline from Rs 281 crore to Rs 221 crore.

Birla Sun Life and Morgan Stanley portfolios slipped 2.7 per cent and 2 per cent respectively.

While the pure equity portfolio of Fidelity fell by more than Rs 500 crore, in case of UTI MF, the fall was of about Rs 400 crore.

In contrast, Benchmark MF reported nearly three-fold assets growth from a little under Rs 1,000 crore.

The other two fund houses that grew assets were DWS, from Rs 2,500 crore to Rs 5,400 crore, and ING, from Rs 1,900 crore to Rs 4,000 crore.

LIC MF also managed to nearly double its assets base to a little above Rs 10,000 crore.