The asset base of the country’s top 10 mutual funds declined by a massive Rs 8,900 crore in February, mainly on account of lower inflows from retail and high networth individuals (HNIs). The assets under management (AUM) of the fund houses slumped to Rs 18,68,404 crore in February, as against Rs 18,77,303 crore in January, as per the data of the Association of Mutual Funds in India (Amfi).
Industry experts attributed the monthly drop in the asset base to lower money infusion by retail investors and HNIs. “Historically over the last decade, the post Budget month has been weak and this February was not an exception,” Reliance Mutual Fund CEO Sundeep Sikka said. “India’s long term growth story remains intact and corporate earnings are beginning to bounce back. In that context, the current correction gives a great opportunity for retail investors to get back or increase allocation in MFs and direct equity at lower valuations. The investor base in India is expanding and 2018-19 will not be any different,” he added.
Of the top 10 fund houses, six witnessed a drop in their asset base, while the remaining four — Kotak Mahindra MF, Axis MF, Reliance MF and ICICI Prudential MF saw rise in their AUMs. In absolute terms, UTI MF saw the maximum decline in its AUM, which plunged by Rs 4,824 crore from the preceding month to Rs 1.56 lakh crore at the end of February.
This was followed by HDFC MF, which saw its asset base slumping by Rs 3,221 crore to Rs 2.99 lakh crore. Next comes, SBI MF, whose AUM dropped by Rs 2,280 crore to Rs 2.16 lakh crore.
Birla Sun Life MF, Franklin Templeton MF and DSP Black Rock MF too witnessed a slip in their respective AUMs. On the other hand, the asset base of Kotak Mahindra MF, Axis MF, Reliance MF and ICICI Prudential MF rose in the range of Rs 96 crore to Rs 2,584 crore.
Overall, the assets under management of the MF industry, comprising 42 players, declined to Rs 22.2 lakh crore at the end of February from an all-time high of Rs 22.41 lakh crore in January-end. Retail investors pulled out over Rs 1.33 lakh crore from the mutual fund industry during the period under review, while HNIs withdrew over Rs 1,100 crore.
Mutual funds are investment vehicles made up of a pool of funds collected from a large number of investors. These funds are invested in stocks, bonds and money market instruments, among others.