It is said that all good things come to an end, but then so do all bad things. And if the way the last month of 2008 signed the year off is any indication, one can expect 2009 to be filled with more positivity than its predecessor.
In December 2008, the Sensex climbed up by 9.31 per cent. And consequently, the mutual fund industry's assets under management (AUM) increased as well, by 4.73 per cent. There industry witnessed an inflow of Rs. 19069.45 crore during the month.
Reliance Mutual Fund maintained its top position with an AUM of Rs. 70208.10 crore, which is a third more than its second closest competitor HDFC Mutual Fund, which manages around Rs. 46757.45 crore. UTI Mutual Fund retained its third position with an AUM of Rs. 42548.17 crore witnessing an inflow of Rs 4190.03 crore.
The top 10 fund houses in terms of AUM have remained unchanged except for the tenth position that has been taken over by LIC Mutual Fund from DSP BR Mutual Fund. It is noteworthy that LIC's AUM has witnessed an upsurge of 23.24 per cent which is the highest change in percentage terms.
As against two fund houses that reported an increase in their AUMs in November, it is indeed a positive note that 16 fund houses saw an upsurge in their AUMs in December. The fund houses that recorded a double digit rise were LIC Mutual Fund, JP Morgan, Birla, ICICI and Canara Mutual Fund.
However, it seems that the new entrants had to bear the brunt of investors' drowning faith on the shaky markets resulting from the global recession blues. The three fund houses that shed their AUM the most were Edelweiss Mutual Fund, Mirae Asset Mutual Fund and Bharti AXA Mutual Fund, witnessing a fall of 53.14 per cent, 35.50 per cent and 31.61 per cent respectively. The above mentioned fund houses had started their operations in India in 2008 itself.
2008 had been the most terrible year for the Indian capital markets, with the Sensex falling the most in the past 30 years, a fall of 52.47 per cent. The mutual fund industry's AUM also shrank by 24.19 per cent during the same time. But on a positive note, during the same year, the industry grew to its biggest size of Rs. 6 trillion (Rs 6 lakh crore) in May 2008. While it saw five new fund houses budding on the block last year, two of them have still refrained from any business activity so far.
Let's hope that the December effect rubs on the coming months of 2009 and we see the market's convalescence journey take stride.
The AUM figures used above are the average asset under management for the said month.