Buoyant market prompted equity funds to look up

Our Bureau

Major escalation


Fixed maturity

plans have continued their record collections

NFOs of

a few equity and hybrid equity funds also added roughly Rs 2,800 crore

Kolkata, Dec. 6

A major escalation in mobilisations propelled mutual funds to post a marked increase in their asset bases during November.

The trend, point out MF circles, has reflected in a 10 per cent increase in the industry's overall assets under management (AUM) - an addition of Rs 31,658 crore, which has led the total assets to stand at Rs 3.41 lakh crore. This is a new high for fund houses.

A buoyant stock market in particular prompted equity funds to look up. These, say distributors, recorded strong mark to market gains in the region of Rs 6,000 crore on the back of 5.67 per cent growth in the Sensex and 5.62 per cent growth in the Nifty.

Mr Sameer Kamdar, Head - MFs, Mata Securities, said fixed maturity plans (FMPs) have "continued their record collections". As many as 39 FMPs were launched in November, against 22 that were rolled out in October.

Equity funds

NFOs of a few equity and hybrid equity funds also added roughly Rs 2,800 crore to the industry AUM, he said, adding that liquid and other categories of fixed income funds saw strong mobilisations. These accounted for the bulk of the remainder of the total collection figure.

FMPs, as indications suggest, will continue to be introduced. A few - like DWS Deutsche MF's fixed term series 19 - have just closed for subscription, while others expect to launch such short-term products shortly.

A number of fund houses that ended the month with decent mobilisations did so on the back of strong economic prosperity witnessed in the country, it is felt. Renewed investor participation was evident during the month. The arrival of new options real estate and commodities besides gold exchange traded funds will further drive the asset management business, sources observed.

Mid-caps

Other sections incidentally are of the view that mid-caps, or at least a number of them, may well propel the indices further, despite the fact that these stocks have not participated much in the recent bull run.

Since June this year, large-cap stocks have grossly outperformed mid-caps, note distribution company SKP Securities. However, mid-caps now are tending to move up again. At any rate, their potential has not frittered away.

An SKP Sec review till about end-November has found that mid-cap funds have on an average provided 15.97 per cent, compared to the 16.64 per cent delivered by their large-cap counterparts. These figures pertain to the August 25-November 24 period.

Diversified funds have given an average 16.14 per cent during this period. During October 20 and November 24, mid-cap funds provided 7.28 per cent.

(This article was published in the Business Line print edition dated December 7, 2006)
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