The assets under management (AUM) of mutual funds dipped four per cent in the September quarter to Rs 8.08 lakh crore (previous quarter Rs 8.47 lakh crore), according to data released by the Association of Mutual Funds. The fall recorded by the industry was sharpest since December 2010.

Investor sentiments were hit by the volatility in both equity and debt markets due to sharp fall in the rupee against the dollar. Of the total 44 fund houses, 34 registered a fall in AUM in the September quarter.

HDFC, Reliance retain

Despite the fall in assets under management, HDFC and Reliance retained their top position. HDFC’s AUM was down two per cent at Rs 1.03 lakh crore, while Reliance’s dipped five per cent at Rs 93,200 crore.

ICICI Prudential Mutual Fund was ranked third with assets of Rs 85,200 crore, even as its asset fell seven per cent.

Aashish P. Somaiyaa, CEO, Motilal Oswal AMC, said it was a turbulent quarter for the industry with August being the worst.

“There was a huge outflow from liquid funds as liquidity suffered due to the sharp rupee depreciation. We expect things to stabilise hereon, with the rupee recovering some lost ground,” he added.

Equity mutual funds’ witnessed six per cent fall in AUM at Rs 1.86 lakh crore, as share prices of most blue chip companies tumbled. Mutual fund investors panicked and sold their units to trim losses. The benchmark Nifty dipped two per cent during the quarter.

GOLD ETF AUM UP

Bucking the bearish trend, assets under gold exchange-traded funds moved up one per cent as domestic gold prices moved up.

The rise in the domestic gold price was aided by an increase in global prices and the weak rupee against the dollar.

However, the Government’s measures to taper gold demand resulted in investors turning bearish on this segment. Many preferred to book profits leading to an outflow of Rs 7,000 crore in the first two months of the quarter. The consolidated assets of money market and ultra short-term funds dipped Rs 41,400 crore in the September quarter, the biggest combined loss since September 2010. The fall in assets was due to heightened volatility in the money market, after the RBI tightened liquidity in July to curb the rupee’s fall.

Fixed maturity plans saw inflows of Rs 14,200 crore during the quarter on the back of rising yields. Of the 167 new funds offer during the quarter, 159 were of fixed maturity against 54 launched in the June quarter. The fund houses tried to woo investors with closed-ended debt-oriented schemes which lock in the high yield over the period of the scheme with tax exemption.

>suresh.iyengar@thehindu.co.in

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