Mutual fund assets breach Rs 8 lakh cr mark in May

Total assets managed by domestic mutual funds exceeded Rs 8 lakh-crore mark in May, rising around 5% over the previous month, according to data by Association of Mutual Funds in India (AMFI).

Corporates and high net worth individuals (HNIs) have been pumping money into debt funds and hybrid funds
(a mixture of debt and equity), anticipating a stable bond market near term,” said A Balasubramanian, CEO, Birla Sun Life Asset Management.

AMFI data are based on the average of the assets managed by mutual funds during the month. This is for the second time in the past six months that mutual fund assets have topped Rs 8-lakh crore. In November last year, the number had touched Rs 8.07-lakh crore, but fell to Rs 7.4-lakh crore by March 2010. The figure has been on an uptrend for the past couple of months, and now stands at Rs 8.03-lakh crore.

Amongst the larger fund houses in the country, all the top three asset management companies, namely Reliance, HDFC and ICICI Prudential, have clocked a 6-8% rise in their asset base. With an 8% increase last month, HDFC Asset Management became the second fund house, after Reliance Mutual Fund to cross the Rs 1-lakh crore-mark.

Fund houses like Axis, Edelweiss, Kotak, L&T, Peerless, Shinsei and Taurus, which have a dominant debt portfolio, have registered a double-digit percentage growth in their AAUM. Simultaneously, fund houses with a larger equity asset base have witnessed a decline in their assets in May. These include AIG, DSP Blackrock, Fidelity, HSBC, Mirae, Morgan Stanley and Sundaram BNP Paribas.

However, the decline has been marginal ranging from 0.3% to 5.7% and can be attributed to the fall in equity valuations, following a decline in share prices last month.

Inflows into equity schemes have been tepid, but fund managers are hopeful that they will pick up now that valuations are cheaper than what they were a couple of months ago. According to some industry experts, retail investors are currently resisting equity investments anticipating further corrections in the market.

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