MF assets grow 41% in FY07

Mutual fund assets grew by 41.23 per cent in 2006-07 following a stellar stock market during the year, but the total assets under management (AUM) dipped in March.

The industry ended the financial year with AUM of Rs 3,26,328.47 crore, a growth of 41.23 per cent over Rs 2,31,045.38 crore in 2005-06. With this, the industry has grown around 142 per cent since March 2004, when its AUM was Rs 1,34,839.01 crore.

In March, the industry's AUM dipped 7.47 per cent from Rs 3,52,686.53 crore in February as investors redeemed liquid funds for advance tax payments, while fund houses used a part of their corpus to pay dividends.

Reliance topped the AUM chart, followed by ICICI Prudential and UTI MF. HDFC continued at the fourth position. "This year, growth may not be as phenomenal as last year owing to weak sentiment in the equity markets. Fund houses would focus on debt schemes, which are giving stable returns compared with equity schemes," said a fund manager.

Eight equity new fund offers (NFOs), launched in March, collected around Rs 2,834 crore, while few fund houses have extended their NFO closing on weak demand.

Of this eight NFOs, six were close-ended, while two were open-ended. ICICI Prudential's Series II Fusion Fund, which was extensively publicised by the fund house, collected around Rs 1,100 crore.

Following the volatile stock markets, investors as well as funds are focusing more on debt schemes compared with equities. Fixed maturity plans (FMPs) are witnessing good collections as they offer attractive interest rates for a one-year period.