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Our Bureau

Mumbai, Jan. 2 The New Year seems to have begun on a positive note for the mutual fund industry, as the assets under management (AUM) have increased by four per cent in December, reversing the earlier trend of declining AUM.

Data released by AMFI show that the AUM of the mutual fund industry stand at Rs 4,18,336 crore as on December end, compared to Rs 4,02,029 crore in November.

Of 37 fund houses, 17 have registered an increase in their asset base, while 18 reported a decline.

Goldman Sachs and Religare AEGON mutual funds have still not started to report the asset base.

The top mutual fund house by asset size, Reliance Mutual Fund reported an increase in asset base by 3.5 per cent. HDFC logged a 5.6 per cent rise. UTI mutual fund gained 10 per cent and ICICI Prudential won 13 per cent.

Major losers include Edelweiss Mutual Fund, whose asset base fell by more than 53 per cent in December. The assets under management of Mirae AMC fell by over 35 per cent during the same period.

While there is not much money flowing into equity schemes, it is the mark-to-market gains that boosted the AUM to some extent, said a fund manager with Sundaram BNP Paribas Mutual Fund.

There might be a short-term rally in the equity markets, but it is unlikely to sustain. Inflows in the equity schemes might be very small for at least the first half of this year, he said. The benchmark index Sensex rose by more than six per cent during December.

Money flow would have happened in most category schemes, said Mr Badrish Kulhalli, Senior Fund Manager-Debt, Principal PNB Asset Management.

Some fund managers said that though significant flow was coming into fixed income funds, equity schemes might fare well as retail investors might choose to invest at lower levels.

Equity schemes might be getting some inflows owing to bottom-fishing by some investors as also liquid schemes from investors who have excess liquidity but less risk appetite, said Mr Kulhalli.

Equity-linked savings schemes would notice substantial inflows in the coming months, said Mr Parijat Agrawal, head of fixed income, SBI Mutual Fund.

The mood among fund managers appears upbeat. Retail investors are coming back into the mutual fund space through investments in gilt and income funds also, said Mr Rakesh Goyal, Head-Distribution, Bonanza Portfolio.

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