Mutual fund assets surge in April

25 fund houses reported a rise of Rs 13,706.87 crore in assets under management

Most mutual fund houses have reported significant gains in their assets under management (AUM) in April, after the usual March phenomenon of corporates pulling out their mutual fund investments coming to an end.

Data on 25 fund houses collated from the Association of Mutual Funds of India (AMFI) and mutualfundsIndia.com "" a speciality data vendor "" show that these institutions have collectively reported an increase of Rs 13,706.87 crore in the first month of the current fiscal to Rs 1,47,390.11 crore.

The notable exceptions were the UTI Mutual Fund, whose AUM decreased by Rs 769.3 crore in April, IL&FS Mutual's AUM down Rs. 238.71 crore and Canbank Mutual's AUM down Rs 146.36 crore.

Sun F&C and Benchmark Mutual Funds also posted marginal losses in AUM in the first month of the current fiscal.

For other fund houses, April has augured well as they have reversed the March tides to show huge gains in assets. Players say that since the equity market had been choppy in April, it can be argued that the growth was largely on the back of fresh investments in funds rather than the growth in investment values.

All the top five gainers among fund houses have broken away from their earlier corpus brackets to enter into new ranges. The most prominent of them is Reliance Mutual Fund, whose AUM has grown by Rs 2,627.52 crore in April to Rs 9,867.52 crore.

Standard Chartered Mutual Fund's AUM surged Rs 2,010.82 crore to Rs. 9,162.35 crore.

Market sources concede that this growth is all the more commendable since the fund house is totally focused on debt funds but add that the choppiness in the equity markets coupled with the return of corporate investors to funds in April has contributed to this growth.

Franklin Templeton Mutual Fund moved up a notch to the Rs 17,000 crore plus club, retaining its position as the largest private mutual fund house for two successive months.

Both HSBC Mutual Fund and Tata Mutual Fund have moved from the Rs 4,000 crore-plus bracket to the Rs 5,000-crore plus bracket.

HSBC Mutual is a relatively new entrant in the industry and Tata Mutual Fund has reinvented itself from a Rs 1,248 crore fund house in April 2003 to a Rs 5,065 crore firm one year later, largely on the back of superior fund performance and aggressive marketing thrust.

The Tata Equity Opportunities Fund and HSBC Equity Fund have been the toppers among diversified equity funds in the last fiscal. The provident fund switch issue notwithstanding, Prudential ICICI Mutual has also gained Rs 984.50 crore in April.

Industry observers point out that the bulk of the money recently flowing into mutual funds has come from corporates parking their excess funds with liquid and short-term funds, apart from the fresh inflows from initial public offers (IPOs), which has helped to expand the retail base of fund houses.

So the coming months may see mutual fund houses pitching hard for corporate investors for short-term funds while at the same time launching frequent IPOs to attract retail investors.