MF industry back on track, funds see AUM grow 4.3%

Written by Markets Bureau | Mumbai | Updated: Mar 4 2010, 05:16am hrs
The improving sentiments in the Indian equity markets, coupled with lower redemption pressure from retail investors and continuous investment from the banks and corporates, led several fund houses to post an increase in their monthly average assets under management (AUM) for February, 2010.

According to the data provided by the Association of Mutual Funds in India (Amfi), average asset under management of 29 fund houses stood at Rs 3,76,947.21 crore in February, up 4.3%, compared to Rs 3,61,289.88 crore in January 2010. Currently, there are 39 fund houses operating in India.

In December 2009 and January 2010 there was a decline in the monthly average AUM numbers as several banks had pulled out money from the mutual funds.

Valueresearch chief executive officer Dhirendra Kumar said, "We can say that confidence has returned to the mutual fund industry. The good news is that, there has been no major redemption pressure from the retail investors as we used to witness earlier, though we need more retail investors to further strengthen the mutual fund industry." The average assets under management of UTI Mutual Fund for February 2010 stood at Rs 79,310.26 crore gaining over 6.44% compared to Rs 74,509.86 crore registered in January 2010. While total average AUM of Kotak Mahindra Mutual Fund was at Rs 40,359.44 crore up by over 9% compared to Rs 36,781.32 crore in January.

Kotak Mahindra Mutual Fund head (equities) Krishna Sanghavi said, Overall inflows in the funds were positive. With good news from the Union Budget announced last week, we hope that we can witness more inflows in the equity schemes in the coming months.

Out of 29 fund houses under review, nine fund houses registered a decline in their monthly average AUM with major decline coming in the Bharti AXA Mutual Fund which saw a fall of over 12% in February compared to January.

While newly launched Axis Mutual Fund saw a surge of over 42% as its average AUM stood at Rs 3,753.87 crore in February compared to Rs 2,641.13 crore in January. Peerless Mutual Fund which was launched in February saw its average AUM at Rs 121.09 crore in February.