The mutual fund industry crossed another peak with ease in the month of August as its assets jumped to over Rs 7 lakh crore, which is a historic high. The retail investor, however, was again put in the shade, as most of the new money that has been collected by the industry came from institutional investors like banks, which looked to park their money with funds for a temporary period as credit off-take has been extremely slow. Even corporates have looked to do the same with some excess cash in their hands.
Out of the month’s gain of Rs 59,984 crore, almost Rs 50,000 crore was contributed just by the liquid plus funds. The inflows from institutional investors in these schemes were the primary cause of the spike. Aside from the sluggish credit demand, another reason for the banks parking money in MFs was that the government securities were expected to be volatile due to rising yields.
While the chance of this money retreating soon is high as businesses increasingly start approaching banks for loans as the season of consumerism starts in earnest in India, yet for the moment, this is celebrations time for the MF industry.
The total assets under management (AUM) of the industry grew by 8.71 per cent to reach a high of Rs 7.50 lakh crore, which is a change of Rs 59,984 crore from the July figure, according to the data provided by the Association of Mutual Funds in India (AMFI). The assets of the industry for July grew by 2.80 per cent, at Rs 6.90 lakh crore.
Looking at categories separately, it is clear that liquid funds registered the maximum percentage change of 27.04 per cent from their July assets, while for Arbitrage funds, the increase was 7.43 per cent. The diversified equity funds too increased their assets, but by a very narrow margin -- 6.65 per cent.
The fund house that registered the highest percentage change in August was Edelweiss MF. Its assets grew by 40.7 per cent, or Rs 28 crore, to reach Rs 95.6 crore. The storyline was shared by Baroda Pioneer MF which also saw a percentage change of as high as 34.79 per cent, or Rs 1,397 crore. Its assets reached Rs 5,414 crore in August. However, these are some of the smallest fund houses in India and even small amounts of change in their collections will add up to huge percentage changes overall.
Therefore, when we speak in absolute terms, the biggest increase in August was notched up by HDFC MF, which gained Rs 10,508 crore over July figures, pushing total assets to Rs 93,874 crore.
The biggest fund house of them all is still Reliance MF even though it gained the second-highest amount after HDFC MF, of Rs 8,979 crore, or a gain of 8.29 per cent.
While LIC MF and UTI MF gained in August too, yet they remained at the third and fourth positions with collections of Rs 7,570 crore and Rs 6,674 crore respectively. Their total assets added up to Rs 41,039 crore and Rs 73,925 crore respectively.
However, it wasn’t a month of universal gain for all in the industry as 9 fund houses saw a fall in their assets in terms of percentage.
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