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Markets Fail to Force Funds' Tempo

AAUM growth for the mutual fund industry in July has been just 2.8 per cent

The market dips and ascents as well as new inflows that drive mutual fund (MF) assets are either forcing new records one month or getting stuck in doldrums the next. But investors still can rejoice that their investments are bound towards one end of the spectrum – gains, which is much better than booking losses month after month in 2008 and first quarter of 2009.

On the MF horizon, the June and July figures for investors may not be very impressive, but the picture looks a tad different if you take a long-term view and look at the growth in Average Assets Under Management (AAUM) since April. The growth is quite impressive at 40 per cent, which is not bad for an economy stuck in a slowdown.

The total assets of the MF industry for July grew by 2.80 per cent to reach a high of Rs 6.90 lakh crore, which is a change of Rs 18,806 crore from June, according to data provided by AMFI.

For the month of July, Reliance MF has retained its top slot on the table with assets of Rs 1.08 lakh crore, registering a marginal growth of Rs 2 crore from its assets in June. It was followed by HDFC MF with Rs 83,366 crore of AUM. HDFC MF however, got the distinction of registering the highest change in terms of inflows. It registered a change of Rs 5,168 crore, while its total assets were Rs 78,198 crore in June. The growth was 6.6 per cent, which was the highest in the top 5 funds.

Meanwhile ICICI Prudential MF reigned in the third spot having registered an inflow of Rs 3,159 crore with its total asset standing at 73,329 crore.

The biggest fund houses retained their position in the Top 10, although their positions saw a little change. Their total assets for the month of July were Rs 5.40 lakh crore in comparison to June when it stood at Rs 5.25 lakh crore. Their percentage share in the total assets of the industry however, did not undergo any major shift as it stood at 78.36 per cent in July in comparison to 78.31 per cent in June.

The drive has not been very pleasant for some fund houses though. Altogether eleven fund houses registered a fall in their assets in terms of percentage when figures for July and June are compared. The biggest loser has been HSBC MF, which registered a dip in assets of 7.51 per cent. UTI MF was the only top 5 fund that landed in negative zone, registering an outflow of Rs 726 crore, or a decline of 1.07 per cent. Among the other decliners were Tata MF (-2.96%) and DSP BlackRock (-0.77%).

Among the smallest fund houses got the biggest boost in terms of percentages. Edelweiss chalked up the sharpest rise, gaining 51.63 per cent for the month. Among the other big percentage gainers were Religare (22.01%), Taurus (15.33%), AIG  (16.11%), and Fortis (10.34%).

If we go back a little into recent history, a surprising amount of assets growth happened in the industry in the month of May. It even made it to the record books. However, a comparison of June depicts a story of a status quo with investors not finding their money growing as much as they would have expected after the show that the markets put up in May. But things should have tilted towards the positive in a major manner in July as markets have rallied due to a host of reasons, including the government clarifying its positive intent on a host of liberalising initiatives, rising global markets, economies of a number of developed world countries showing signs of revival and India and China managing to show very good economic numbers – although, in India’s case, exports are way down. But the month of July has passed and fund investors are looking at registering very small gains, if any. In contrast, Sensex has risen by as much as 8.12 per cent, to reach a more than 12-month high.

Average Assets Under Management (AAUM)
    Assets (Rs Cr)        
Mutual Fund    Jul-09    Jun-09    Change (Rs Cr)    Change (%)
Reliance   108,334   108,332   2   0.00
HDFC   83,366   78,198   5,168   6.61
ICICI Prudential   73,329   70,169   3,159   4.50
UTI   67,252   67,978   -726   -1.07
Birla Sun Life   57,332   56,283   1,049   1.86
LIC   35,094   32,415   2,679   8.26
SBI   34,158   34,061   97   0.28
Kotak Mahindra   31,246   30,833   413   1.34
Franklin Templeton   27,630   25,473   2,157   8.47
IDFC   22,709   21,676   1,032   4.76
Tata   20,594   21,223   -629   -2.96
DSP BlackRock   17,262   17,396   -134   -0.77
Deutsche   14,309   13,616   693   5.09
Sundaram BNP Paribas   13,347   13,315   32   0.24
Religare   12,240   10,031   2,208   22.01
Fidelity   9,329   9,375   -47   -0.50
PRINCIPAL   9,235   8,695   539   6.20
HSBC   8,884   9,605   -721   -7.51
Fortis   8,857   8,028   830   10.34
Canara Robeco   7,854   7,624   230   3.02
JM Financial   7,750   7,771   -21   -0.27
Baroda Pioneer   4,017   3,723   294   7.89
JPMorgan   3,700   3,766   -66   -1.75
DBS Chola   2,733   2,509   225   8.96
ING   2,315   2,397   -82   -3.43
Morgan Stanley   2,167   2,208   -41   -1.86
AIG Global Investment Group   1,797   1,548   249   16.11
Benchmark   1,219   1,120   99   8.88
Taurus   647   561   86   15.33
Bharti AXA   263   243   20   8.29
Mirae Asset   227   238   -11   -4.65
Sahara   207   213   -5   -2.51
Escorts   205   201   3   1.51
Edelweiss   68   45   23   51.63
Quantum   68   67   1   1.34
Total    689,743    670,937    18,806    2.80