This story has been modified; please see the clarification at the end of the article
Hopes are rising for the Indian mutual fund (MF) industry. Amid the government showing keen intent to revive the struggling sector, the MF industry has posted its first rise in assets in the last four quarters. In the quarter ending June, the MF industry reversed the trend of consistent decline in its average assets under management (AUM) as it witnessed an increase of 4.12 per cent to inch closer to the Rs 7 lakh crore mark.
Good inflows in liquid and money market schemes of the industry, along with reasonable influx of money into income funds and to some extent in the diversified equity schemes, helped the regulations-hit MF houses witness a rise in their assets. According to statistics from the industry body Association of Mutual Funds in India (Amfi), the average AUM in the April-June quarter stood at Rs 6.92 lakh crore against Rs 6.64 lakh crore in the previous quarter.
All the top asset management companies (AMCs), including HDFC MF, Reliance MF, ICICI Prudential MF, Birla Sun Life and UTI AMC managed to increase their assets. Interestingly, ICICI Pru and Birla Sun Life, outperformed the industry's growth as their average AUM moved up between six per cent and 10 per cent while their peers grew at around 3-3.5 per cent.
| RAINING MONEY Performance of top 10 AMCs (April-June) | ||
| AMC | Average AUM (Rs cr) | Change (%) |
| HDFC | 92,624.52 | 3.05 |
| Reliance | 80,694.47 | 3.31 |
| ICICI Pru | 73,049.66 | 6.30 |
| Birla Sun Life | 67,205.95 | 9.92 |
| UTI | 60,922.61 | 3.40 |
| SBI | 47,184.10 | 12.23 |
| Franklin | 35,532.65 | 3.02 |
| DSP BlackRock | 30,001.76 | 2.40 |
| IDFC | 27,146.53 | 6.67 |
| Kotak | 25,323.52 | -1.61 |
| Industry | 6,92,180.48 | |
| Average AUM for the past six quarters | |
| Quarter | Average AUM (Rs cr) |
| Mar,11 | 7,00,809.91 |
| Jun,11 | 7,43,719.40 |
| Sep,11 | 7,12,741.73 |
| Dec,11 | 6,81,707.71 |
| Mar,12 | 6,64,791.56 |
| Jun, 12 | 6,92,180.48 |
| Source : Association of Mutual Funds in India (Amfi) | |
“We continued to see renewal of fixed maturity products (FMPs) and liquid money too, poured in. However, it was not a significantly different quarter,” says Ajit Menon, executive vice president, DSP BlackRock Mutual Fund. The fund house saw its assets rise 2.4 per cent. For that matter, even LIC Nomura Mutual Fund, which had lost over 70 per cent of its assets over the last few quarters, had its assets up by 2.07 per cent. The average AUM of SBI Mutual Fund, next to the industry’s big boys, grew over 12 per cent as the fund house had a massive rise of Rs 5,000 crore in its assets. Deepak Chatterjee, chief executive officer of SBI MF, says, “It was a phenomenal quarter. With investors’ rising confidence, we could mobilise significant chunk of money in our debt funds.”
According to latest data available for inflows till May 31, the MF industry had seen a net inflow of Rs 1,19,488 crore across categories. Liquid and money market funds led with over Rs 1,00,000 crore of inflows followed by income funds, which witnessed Rs 19,454 crore as net inflows during April-May. Amfi will release the category-wise statistics for June later this week.
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However, the equity segment continued to be ignored by investors. According to industry executives, the quarter began with choppy stock markets and the situation worsened with high volatility, which kept investors away from equity funds. Out of the 44 AMCs, 15 could not mop up assets and declined as deep as 47 per cent (in case of Escorts MF), mainly on the back of the low base. Among other losers were L&T MF (-21.8 per cent), JP Morgan MF (-17.08 per cent) and Fidelity MF (-15.07 per cent).e s
Though, industry broke the previous three quarters’ trend of declining assets, on a year-on-year basis assets are still seven per cent down. Industry, which had been enjoying a Rs 7 lakh crore plus mark for the first three quarters of CY11, dipped below it in the December quarter and is still struggling to come above it.
Correction
The headline of this article has been changed from "MFs post rise in assets after 4 quarters" to "MFs post rise in assets after 3 quarters".