The Hindu Business Line : Mutual funds asset base shrinks on tight liquidity

The mutual fund industry saw a huge dip in asset base in December on tight liquidity, according to data released by The Association of Mutual Funds in India.

The month also saw Reliance Mutual Fund replacing Prudential ICICI Mutual Fund as the largest private sector fund in terms of assets under management.

The industry lost Rs 16,548.4 crore or 4.87 per cent at Rs 3,23,601.79 crore in December, while asset bases of 23 mutual funds declined.

"There has been very tight liquidity in the markets due to corporates paying advance taxes. This has led to redemptions mostly in liquid funds. Also, banks have pulled out from these funds to maintain the CRR leading to the drop in asset bases of most mutual funds," said Mr N. Sethuram Iyer, Chief Investment Officer, SBI Mutual Fund.

Although UTI Mutual Fund continues to maintain the largest assets in December, Reliance Mutual Fund saw an increase in asset base of Rs 2,291.02 crore at Rs 36,927.92 crore to topple Prudential ICICI Mutual Fund at Rs 33,304.58 crore as the largest private sector mutual fund in the country.

NFO boost

"The new fund offer, Reliance Long-Term Equity Fund which collected about Rs 2,000 crore, has helped us to gain more assets in the last month. However, our main strategy is to continue building newer markets and increase our customer base. We have a healthy equity-debt mix in assets which has helped us to reduce the risks and not affect our asset base," said Mr Vikrant Gugnani, President, Reliance Mutual Fund.

The top five mutual funds in terms of assets were UTI Mutual Fund at Rs 38,108.50 crore, followed by Reliance Mutual Fund, Prudential ICICI Mutual Fund, HDFC Mutual Fund at Rs 29,635.29 crore and Franklin Templeton Mutual Fund at Rs 23403.16 crore.

LIC Mutual Fund saw the steepest decline in asset base by Rs 4,881.58 crore or 29.62 per cent at Rs 11,599.32 crore. UTI Mutual Fund was second in terms of asset loss by 8.44 per cent or Rs 3,514.01 crore.

More Stories on : Mutual Funds | Asset Management Companies

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Anti-cyclone seen affecting easterly wave

Reliance Comm may raise funds abroad

`Broad consensus' on phasing out of CST

Mutual funds asset base shrinks on tight liquidity

ONGC may announce gas find in KG basin soon

Smart cars now powered by Indian brains

DLF to raise Rs 12,250 cr

Ministries lock horns over duty cut on palm oil

Sensex closes above 14,000

Aventis: Betting on earnings

Expansion move buoys Lanxess

Brands toying with WAP for new age marketing