Falling equity markets coupled with advance tax payments took a toll on the mutual fund industry as its average assets under management declined by about four per cent in the quarter ended September as compared to the preceding quarter.
The AUM of the industry fell from Rs 7.43 lakh crore as of June-end to Rs 7.12 lakh crore as of September-end, according to data on the AMFI Web site.
Unruffled
However, fund analysts are not too ruffled by the decline. “The drop of roughly Rs 30,000 crore is very normal as it has occurred over a quarter. Also, this quarter equity valuations have seen a sharp fall, and inflows into the debt funds from the banking sector has been gradually decreasing due to RBI guidelines,” said Mr Hiren Dhakan, Associate Fund Manager, Bonanza Portfolio.
The BSE Sensex gave a negative return of 12.3 per cent in the July-September period. What has compounded the problems for the MFs is that equity funds have been seeing redemptions for more than a year now.
SIPs generate interest
“People are confident about the India story and want to invest. But they realise that there is no harm in waiting for three, six or even nine months. Nobody is in a hurry to invest. However, having said that, SIPs have continued to generate interest among investors,” said Mr Arindam Ghosh, Head - Retail Sales, JP Morgan Asset Management.
Of the fund houses, the top five fund houses — HDFC, Reliance, ICICI, UTI and Birla Sun Life — saw their AUMs drop. The biggest drop was seen in the case of Reliance Mutual Fund, whose AUM fell by 10.4 per cent. This not only brought down the AUM of the fund house below the Rs 1 lakh crore level but also saw it ceding the number one position to HDFC MF.
According to AMFI data (made available since April 2006), Reliance Mutual Fund has held the mantle of the biggest fund house since April 2006.
The AUM of HDFC Mutual Fund as on September 30, stood at Rs 91,827 crore while that of Reliance was Rs 90,660 crore.
According to fund analysts, gold funds have been the best performers this quarter. “Between July and September, gold funds have given absolute returns of about 20 per cent. Also, the launch of gold funds, which invest in gold ETFs, led to an increase in AUM.
“The ease of investing in these funds without a demat makes it more attractive to investors,” said Mr Abhinav Angirish, MD &CEO, Abchlor Investment Advisors.