Lump-sum investments into mutual funds have dried up in the last few months and inflows have been consistent only through SIPs.
HDFC Asset Management Company (AMC) posted a 45% increase in its net profit to Rs 352.5 crore for three months ended December, 2019, on the back of higher total income and lower expenses. The quarter average assets under management (QAAUM) stood at Rs 3.82 lakh crore as on December 31, 2019, compared to Rs 3.35 lakh crore as on December 31, 2018, a growth of 14%.
Total income of the AMC for the third quarter this fiscal stood at Rs 592 crore as against Rs 532.7 crore, a growth of 11%. The total expenses came down to Rs 126 crore in Q3FY20 compared to Rs 164.4 crore in previous financial year. QAAUM in actively managed equity oriented funds, excluding arbitrage funds and index funds, stood at Rs 1.66 lakh crore as on December 31, 2019, with a market share of 15.8%. The AMC is the largest actively managed equity-oriented mutual fund manager in the country.
According to the press release by the company, there are 3.42 million systematic transactions with a value of Rs 1,220 crore processed during the month of December 2019. In the past few months flows into equity funds have coming down, but HDFC AMC believes that lower inflows into equity funds would improve over a period of time as as Indian investors are significantly under allocated to equities and their interest in equity will continue to grow.
Lump-sum investments into mutual funds have dried up in the last few months and inflows have been consistent only through SIPs. Inflows into equity oriented schemes of mutual funds saw net inflows of Rs 4,499.39 crore in December, second lowest in the current financial year. In November 2019, equity schemes had seen net inflows of Rs 1,311.65 crore, the lowest levels since June 2016. The data from Association of Mutual Funds in India (Amfi) shows that net inflows into equity funds in the period between April and December stood at Rs 53,391 crore while inflows through SIPs is at Rs 74,398 crore during the same period.
HDFC AMC has over 70,000 empanelled distribution partners across IFAs, National Distributors and banks, serviced through a total of 220 branches out of which 144 are in B-30 locations. The contribution of B-30 locations to the total monthly average AUM is 12.9%.