MFs end May on high note

Written by Markets Bureau | Mumbai | Updated: Jun 2 2009, 06:29am hrs
Assets under management (AUM) of several fund houses gained a significant amount in May compared to April, representative of smart inflows from retail investors in the Mutual Fund (MF) industry. AUM refers to the market value of assets that an investment company manages on behalf of investors. Reliance MF for instance, the countrys biggest fund house, crossed the Rs 1 lakh crore mark in May.

Fund managers attribute these gains to a surge in the Indian equity market in the last one-month. Data released of 27 fund houses by the Association of Mutual fund in India (Amfi) showed AUM of Rs 4,40,589.64 crore for May, gaining 16.84% or 63,502.22 compared to Rs 3,77,087.41 crore for April.

AUM of Reliance MF stood at Rs 1,02,730.15 crore, up by 14,342.16 crore or 16.23% compared to Rs 88,387.98 crore in April. Sundeep Sikka, CEO of Reliance Capital Asset management, said, We can attribute this surge to improving liquidity and strengthening market sentiment. As an industry, we still have a long way to go in achieving mutual fund penetration in every household in the country and Reliance MF is aiming to achieve that going forward.

Baroda Pioneer MFs AUM which was at Rs 1,882 crore in the month of April saw its AUM almost double to Rs 3,483.36 gaining 85.09% or 1,601.35 crore in May. AUM of Religare MF did not increase to the same degree and was Rs 9,289.56 crore in May adding Rs 2,015.57 crore or 27.71% compared to Rs 7,273.99 crore in April.

Saurabh Nanavati, CEO of Religare MF, made the following observation, The numbers are in line with the equity markets performance last month. However, it is noteworthy that our MF grew quite successfully even during January and February this year which was a relatively tougher period. While we think, fresh inflows are once again coming in the MF schemes, there is also large amount of inflows in the debt and short-term debt schemes compared to equity schemes.

HDFC MF was up 18.04% as its AUM for the May stood at Rs 75,406.10 crore compared to Rs 63,880.63 crore. AUM of LIC MF stood at Rs 28,598.75 crore in May adding 9.51% to its April count of Rs 26,115.26 crore.

Despite such good show by the fund houses in their AUM, equity schemes are not seeing adequate inflows. Fund houses have to chalk out some plans to attract investors in the equity schemes. Apart from that, several new fund offer (NFO) are in pipeline and we have to see how it fares in this market, said a fund manager on condition of anonymity.