The Hindu Business Line : Dip in MF assets under management in June

Going down
Deceleration has been compounded by large outflows from fixed income funds due to hardening interest rates, higher advance tax payments and redemptions in bank deposits at the end of Q1.

Kolkata , July 6

The latest round of month-end corpus changes has underlined one of asset management industry's worst fears: There has been a definite flight of money from mutual funds in June, estimated at Rs 10,000 crore.

The deceleration, according to fund houses and their distributors, may be attributed to a number of factors. Broadly, the roll-back in the equity market and changes in the debt market are being cited as the prime reasons.

Numbers collated by the Association of Mutual Funds in India show the aggregate AUM (assets under management) has dropped to Rs 2,65,870 crore in June from Rs 2,75,948 crore recorded a month earlier. This excludes fund of funds (FoF) figures.

While the top players have maintained their positions on a month-on-month basis, an overwhelming majority has reported a decline in assets. The exceptions include HSBC MF, Standard Chartered MF and Tata MF.

Mr Sameer Kamdar, National Head - MFs, Mata Securities, feels the deceleration is partly on account of the equity market meltdown. This has been compounded by large outflows from fixed income funds — a trend that materialised due to hardening interest rates, higher advance tax payments and redemptions in bank deposits at the end of the first quarter.

It may be mentioned here that Prudential ICICI MF has remained the market leader (after having beaten erstwhile leader UTI MF to occupy this slot in May), with Rs 30,142 crore - a decline from Rs 32,150 crore registered in end-May. This is followed by the likes of UTI MF, Reliance MF and HDFC MF, AMFI data indicate.

Reliance Equity

The story of Reliance Equity may well come to the fore in the context of the latest development, simply because it is the largest scheme of its kind, some distributors point out. The latest tally for June puts its assets at about Rs 5,260 crore, down from Rs 5,520 crore or so recorded at the end of the previous month. Reliance Equity, like its peers in the equity funds category, seems to have been affected by the adverse sentiments that have recently come to rule the stock market, it is felt. The fund has not delivered impressive returns since its launch in March.

At this juncture, some of the other big equity funds are HDFC Equity, Fidelity Equity, Franklin India Flexicap and SBI Bluechip. Each of these schemes has in recent times seen its corpus swell to firmly cross Rs 2,000 crore.