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MF Industry AUM Sets Record

The month of May has powered the mutual fund industry to its best-ever moneyed position

After undergoing an industry-threatening period for much of last year, the very-special month of May has brought good news on the assets front for the mutual fund industry as well as for their investors, who have seen their money grow by surprising amounts.

Following the extraordinary gains on equity markets, the total assets of the mutual fund industry rose by 15.9 per cent to touch their highest ever number-- Rs 6.39 lakh crore.

The fund houses cumulatively added Rs 87,600 crore in May to their average assets under management (AUM), as disclosed by AMFI.

The marvel-of-the-month, amid all the ecstasy, was Reliance Mutual Fund, which crossed the Rs 1 lakh crore AUM mark. This was a first for any fund house in India. It reported its average AUM at Rs 1.02 lakh crore for the month of May. It added Rs 14,350 crore to its base, which is an increase of 16 per cent. However, this is not the only time the fund managed to cross the Rs 1 lakh crore mark. It managed the feat way back in April 2008 (just for a few days), but as a result of the stock market crash, its AUM fell significantly under the astronomical-mark. May 2009 is the first time that it has been able to retain its AUM above that mark at the end of the 31-day period.

The rise in assets of fund houses has specifically been driven by diversified equity funds, which gained 30.65 per cent, which was their best in past 17 years. The gains for the Sensex and the Nifty were their best in the same period -- 28.25 per cent and 28.06 per cent respectively.

The top 10 fund houses held onto their respective ranks, except Kotak MF and LIC MF, even as they added Rs 66,430 crore to their cumulative shares during this period – which also means the gap between the top 10 funds is big enough to prevent overtaking manoeuvres unless the collections are large enough and come at a quick gallop.

(Check out where your funds stand and the latest value of your portfolio using the tool My Portfolio)

Deriving comfort and confidence in equal measure from the overachieving equity funds, the mutual fund industry is gearing up to launch new fund offers (NFOs) and thereby capitalize on the positive sentiment in investors mind after so many feelgood events having come to pass. While some have already launched new funds, a lot many are awaiting the Securities and Exchange Board of India’s (SEBI) approval for the same.

Also see: How They Stack Up