The Hindu Business Line : Wide change in asset base for equity schemes

Kolkata April 4 Assets under management (AUM) of some of the country's better known equity funds have undergone changes last month, with more than just a few surprises in terms of gainers and losers.

While funds such as ICICI Prudential Power and DSP Merrill Lynch Technology.com have gained significantly - for both, this is about 30 per cent - quite a few have lost considerable ground. For some of them, the slide is in double digits.

Percentage changes (in asset sizes) have varied quite widely, indicates a review done by Plexus Management. In a few cases, this has been more than 15 per cent.

This set includes the likes of Reliance Regular Savings Hybrid (39 per cent), Birla Sun Life Equity (19 per cent), HDFC Index Sensex Plus (18 per cent) and JM Telecom (16 per cent).

On the other side of the range are funds like Principal Resurgent Equity (down 27 per cent), ABN Amro Equity (down 20 per cent), HDFC Multiple Yield (down 20 per cent) and Standard Chartered Imperial Equity (down 16 per cent).

In a few odd cases, there has been practically no change at all.

These include HDFC Long Term Equity, Tata Midcap, Birla Sun Life 95 and Kotak Tech.

Mr Prasunjit Mukherjee, who heads Plexus, referred to changes in investors' preferences, some stemming from uncertainties in the market and some from year-end compulsions, which have ultimately led to the variations.

Two categories - tax-saving funds and index funds - stand out in this context, thanks to the very conspicuous modifications some of these have recorded in March, he added.

In terms of overall AUMs of fund houses, some of the biggest losers are ING Vysya MF (a 40 per cent drop), BOB MF (31 per cent), DBS Chola MF (25 per cent) and Benchmark MF (21 per cent). In absolute terms, the list of AUM losses is topped by three of the most prominent players: ICICI Prudential MF (a decline of Rs 5,411 crore), UTI MF (Rs 3,020 crore) and HDFC MF (Rs 2,721 crore). There are only four gainers - Reliance, Fidelity, Quantum and Sahara.

Factors leading to changes

Large advance tax payments, the urge to pay interim dividend by companies and tight conditions in the money market (which had banks pay very high short term deposit rates to customers who pulled out of MFs in favour of FDs) are being cited as the major reasons for the changes.

There were also mark-to-market losses on equity assets, noted Mr Sameer Kamdar, County Head - MFs, Mata Securities, with reference to the latest asset figures released by the Association of Mutual Funds in India (AMFI).

Except a few, most players lost significantly. This, irrespective of the launch of a record number of fixed maturity plans (FMP), he added.

"Another very interesting feature for March 2007 is that while the industry's closing assets are Rs 3,26,328 crore, the average assets for the month stand at Rs 3,59,879 crore, a difference of a whopping Rs 33,551 crore thereby indicating large scale withdrawal/redemptions towards the month end," Mr Kamdar mentioned.

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