• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Suresh Pathasarathy

BL Research Bureau Data disclosed by AMFI for October show that the assets under management for the mutual fund industry have witnessed a fall of 18.4 per cent or Rs 97,196 crore.

The assets under management (AUM) at the end of October stood at Rs 4,31,901 crore, down from Rs 5,29,103 crore for September. The question that now arises is, how much of this fall was caused by a decline in equity fund NAVs due to stock markets and how much represented real outflows? Here’s a rough estimate.

The equity markets witnessed a steep fall in October, with broader indices such as BSE 500 losing 27 per cent. If equity fund NAVs matched this decline, this would have contributed to a decline of Rs 35,018 crore in the assets of equity diversified schemes (Rs 1.29 lakh crore by end of September).

This suggests that the remaining decline of Rs 62,178 crore could have been the net outflows from funds, both debt and equity.

Reports already suggest that mutual funds faced redemption in liquid schemes and fixed maturity plans in October. The break up of assets fund-wise suggests that Mirae Asset Mutual Fund saw the sharpest decline in assets under management in October, AUM down by 55 per cent, or Rs 1,305 crore in October. AIG saw the second-largest percentage decline, with a 44-per cent fall in its assets.

On the other hand, mutual funds such as Birla Sun Life have reported only a moderate drop of 9 cent, HDFC Mutual Fund lost 12 per cent and UTI has reported a decline of 14.2 per cent in its asset base. This implies that these funds were probably able to contain outflows during this period.

The asset base of ICICI Prudential MF has fallen by more than 21 per cent in October, shaving assets worth Rs 10,590 crore in a month. UTI MF’s assets under management recorded a fall of more than 14 per cent while that of Birla Sun Life fell by nine per cent.

Smaller fund houses such as Canara Reboco, ING Mutual and Lotus India have also seen assets decline by between 30 and 33 per cent in October. Fund houses, which had fixed maturity plans, which had exposure to NBFC and realty paper as well as pass-through certificates, were viewed with caution by investors and contributed to redemptions in such funds.

More Stories on : Mutual Funds

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

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line