The Hindu Business Line : Despite mayhem, asset base of MFs shrinks only marginally

DESPITE the mauling of the equity markets in May, the assets under management (AUM) of the mutual fund industry have reduced only marginally. The dip in AUM in May is by a meagre Rs. 6 crore.

Industry watchers attribute this to the fact that immediately after the market crash on May 17, investors presumed that the markets would look up and pumped in new money to take advantage of lower net asset values. However, with the sustained bearishness of the market, fresh investments tapered down towards the end of the month.

"AUM figures for June would accurately represent the erosion of investor interest in mutual funds. Investors found plenty of silver linings in May, even after the market crash," said the marketing head of an asset management company (AMC).

Four new schemes were introduced in May. These collected Rs 792 crore in all.

Public sector-bank sponsored funds registered the deepest fall in AUMs, losing nearly Rs 1,070 crore in May. Of this, UTI, the country's largest fund house, lost Rs 775 crore.

Franklin Templeton AMC continued to top the private sector AMCs with AUM of Rs 17,085 crore. Standard Chartered AMC, the debt specialists, clocked an increase in AUM to Rs 9,362 crore from April's figure of Rs 9,204 crore.

In the equities market, mutual funds were net buyers in May, aggregating Rs 1,005 crore of net purchases of equities, according to data from the Securities and Exchange Board of India.