The Hindu Business Line : Asset base of mutual funds improves 7.32% in April

The asset base of the mutual fund industry increased by 7.32 per cent during April, the first month of the current fiscal. It rose by Rs 38,744.91 crore in April, according to the data released by the Association of Mutual Funds in India (AMFI).

The MF industry now has Rs 5,67,601.98 crore of assets under management, against Rs 5,28,857.07 crore at March end. “The most banks had pulled out their money in March and that money came back in April,” said Mr Ramkumar K. Head (Fixed Income), Sundaram BNP Paribas Asset Management.

Pullouts

The increase in the asset base of the industry or the growth has to be measured on two parameters, namely the fresh investments that have come in and secondly appreciation in equity, said mutual fund analysts.

“The market has gone up by around 10 per cent this month, whereas the increase in the asset base has been less than that; this means that the gain is not significant, as it shows that investors are not really back,” said Mr Dhirendra Kumar, Chief Executive, Value Research.

“There was higher participation in SIPs which shows some sense of investor confidence,” said Mr Arindam Ghosh, CEO, Mirae Asset Management.

“The appetite for debt funds such as long term FMP’s, and for short-term income funds has improved as the Government policy has been giving a positive indication on its approach towards the interest rates,” said Mr Ramkumar

Debts in vogue

The debt funds seem to have come back in a big way in April after a big lull in the past two months, he added. “The markets had been volatile so the AUM will also reflect that. In addition to this, the mutual fund industry is facing competition from the insurance sector so the increase is a positive signal for the MF industry for the fiscal ahead,”, said the head of research of a mutual fund house.

Of the total 34 fund houses, 26 registered an increase in their asset base, while seven showed decreases. (Bharti AXA Mutual Fund has still not started its operations).

Top funds

Reliance Mutual Fund continued to lead the pack, registering an increase in the AUM by 5.99 per cent. At the end of April, its AUM amounted to Rs 96,386.40 crore, falling a little short of crossing the AUM mark of Rs 1 lakh crore.

ICICI Prudential Mutual Fund registered a marginal increase of 2.55 per cent, UTI Mutual Fund (7.28 per cent) , HDFC Mutual Fund (15.62 per cent) and Birla Sun Life Mutual Fund (9.97 per cent).

“There is an increase in the penetration levels in the industry as a whole. The industry might see variations in the asset base but there is a huge growth potential if you look at bank deposits and post-office deposits,” said Mr Sandesh Kirkire, Chief Executive Officer, Kotak Asset Management.

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