Mutual funds’ asset base rises marginally to Rs 25.68 lakh cr in September quarter

PTI New Delhi | Updated on October 04, 2019

The mutual fund industry asset base saw a marginal one per cent increase in the July-September quarter to Rs 25.68 lakh crore against the preceding three months, mainly on account of increase in valuation of stocks due to corporate tax cut.

According to Association of Mutual Funds in India (Amfi), the asset under management (AUM) of the industry, comprising 44 players, stood at Rs 25.50 lakh crore at the end of June quarter. The total asset base of all the fund houses put together was at Rs 24.31 lakh crore in July-September quarter of 2018-19.

In recent months, the mutual fund industry has been grappling with redemption pressures in the wake of debt crises at various groups, including IL&FS, Essel and DHFL. Fund managers said that the industry assets have remained stable in the July-September period of 2019-20 and slight rise in quarterly AUM could be attributed to rise in valuation of stocks due reduction in corporate tax by the government.

“The increase in quarterly AUM is mainly due to increase in valuation of stocks due to corporate tax cut,” said Omkeshwar Singh, head of mutual fund distribution business at Samco. Kaustubh Belapurkar, Director-Manager Research at Morningstar said, “Overall industry assets have remained stable. But we have witnessed that many of the smaller asset management companies (AMCs) have lost assets which have migrated to the larger AMCs.

“Additionally, AMCs which had investments in some of the stressed credits have also witnessed outflows from these funds,” he said. This is largely in line with the current risk off trade by investors moving away from funds that invest into lower rated credits like credit risk funds to funds that typically invest into higher rated credits like banking and PSU funds as well as corporate bond funds. Some AMCs have also benefited from strong equity inflows into their funds, he added.

Of the 44 fund houses, as many as 27 have witnessed a decline in their asset base. Some of the large fund houses such as Nippon India MF, Axis MF, UTI MF and Franklin Templeton witnessed a decline in their AUMs. In addition, DSP MF, Sahara MF, Essel MF, YES MF, IL&FS MF, PGIM India MF and Indiabulls MF, among others, also saw drop in asset base.

In terms of asset size, HDFC MF continued to lead the pack with an AUM of Rs 3,76,597 crore (excluding fund of funds) at the end of the September quarter, followed by ICICI Prudential MF (Rs 3,48,068 crore) and SBI MF (Rs 3,20,663 crore). The overall share of assets managed by the top 10 AMCs (by AUM) is marginally up from 82.83 per cent to 83.66 per cent.

Published on October 04, 2019

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