The Hindu Business Line : Mutual funds asset base rises by 2.77% in August

Mumbai, Sept. 2 After two months of declining assets under management, mutual funds reported a 2.77 per cent increase in assets under management during August.

The month also saw ICICI Mutual Fund displaced by HDFC Mutual Fund at number two position among the top fund houses.

AUMs had declined 5.9 per cent in June and 6.2 per cent in July.

The increase in the asset base in August is a combination of the change in NAVs due to market appreciation and a mild interest in debt schemes, said a fund manager. The benchmark index Sensex went up by around 2 per cent in August, while the S&P CNX Nifty was almost flat over the same period.

In August, only ICICI Mutual Fund, among the top five fund houses, recorded a decrease (3.74 per cent) in asset base.

The mutual fund industry now manages assets of Rs 5,44,317.3 crore compared with Rs 5,29,631 crore in the month of July.

Meagre fund inflows

However industry officials said fund inflows are still meagre. “The macro-economic fundamentals and global factors are not conducive to new flows,” said Mr Sandesh Kirkire, Kotak Mahindra Asset Management Ltd.

While the top position among the fund houses is still maintained by Reliance Mutual Fund, which recorded a rise in its asset base by 4.79 per cent, HDFC Mutual Fund recorded a growth of 6.12 per cent moving to second place. UTI Mutual Fund’s AUM rose 1.79 per cent, while Birla Sun Life Mutual Fund’s rose 1.82 per cent.

Of the total 35 mutual fund houses, 24 of them recorded an increase in their asset base, while 10 reported a decline.

fixed maturity plans

With retail investors being risk averse in such market conditions, fixed maturity plans are in favour, said Mr Paras Adenwala, Chief Investment Officer, ING Mutual Fund. There is also substantial inflow into systematic investment plans, since they provide an avenue for tax planning, said Mr Rakesh Goyal, Head of Distribution, Bonanza Portfolio.

According to fund managers, while the increase in AUM is not substantial, the important thing to notice is that there are not much of redemptions happening, which was the case in earlier declines in the market.

This signifies a rising maturity among investors, one fund manager added.

In August, mutual funds were net sellers in equities to the tune of Rs 368.70 crore, whereas in July they had been net buyers; they bought debt for Rs 7,463.70 crore in August, a 28 per cent increase from July.

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