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Our Bureau

AUM's linear growth connected to current bull phase

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Kolkata Feb 8 Assets managed by diversified equity funds — not including tax-planning, index and sector funds — have for the first time crossed the Rs 1 lakh crore mark.

The trend, considering end-January numbers, is being seen as a continuation of what has been evident since the early days of the current bullish phase: an almost linear increase in the assets managed by diversified funds.

The latest figures, say mutual fund circles, may be seen in the backdrop of a marked growth in assets managed by a number of existing funds. The extent of change makes the diversified category among the highest gainers between December 31, 2006 and January 31, 2007, sources added.

Distribution outfits too consider the Rs 1 lakh crore mark as significant in the context of the current trend.

Diversified entities are a group that has in recent times attracted investors in droves, they point out. The reference is again to the swelling asset bases, especially relevant for some of the largest funds in the equity space.

Plexus Management, a fund advisory firm, puts the diversified funds' overall AUM at Rs 1,00,659 crore at the end of January.

The AUM figures stood at Rs 98,529 crore and Rs 97,442 crore respectively at the end of the two earlier months. Tax-planning funds (ELSS) make the second-largest category with Rs 11,647 crore.

Mr Prasunjit Mukherjee, who heads the firm, feels the investment fraternity needs to recognise the fact — that the mark was crossed last month — more emphatically. "While in the short term a lot will depend on the way the market behaves for the time being, the funds will become more important as investors appreciate them in the real sense. With broadbased portfolios, characterised by stocks selected often from a very wide range of sectors, these score over sectoral plays that are hindered by narrower investment universe."

On another front, Plexus has also listed the top one-month gainers and losers in terms of asset sizes.

Considering all categories of equity funds, the first three in this group are Birla Sun Life Tax Relief 96 (which has seen a 50 per cent change), ING Vysya Nifty Plus (36 per cent) and Reliance Media & Entertainment (23 per cent).

The three top losers are DWS Alpha Equity, HDFC Index Sensex and ABN Amro Equity. For these funds, the corpus loss stands between 29 per cent and 34 per cent.

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