Funds, Ulips feel the heat
Top-5 MFs` AUMs dip by Rs 14,800 cr in June
Priya Nadkarni / Mumbai July 3, 2008, 0:41 IST
A sharp fall in the equity market and tight liquidity condition have taken their toll on the the mutual fund industry’s average assets under management (AUMs), with the top-five funds losing about Rs 14,800 crore in June.
Reliance Mutual Fund, the country’s largest fund house, saw its average AUM plummeting nearly 8 per cent, or by Rs 7,617 crore, in the month under review. AUMs of HDFC Mutual Fund and UTI MF also fell sharply by 6 to 7 per cent, while ICICI Prudential’s AUM rose marginally by 0.7 per cent to Rs 59,474 crore.
The total AUMs of the mutual fund industry in June (excluding those of Taurus Mutual Fund and ING Mutual Fund) were Rs 5,56,103.17 crore, according to data from Association of Mutual Funds in India (Amfi).
Fund house sources attributed the fall in AUMs to advance tax payment and volatility in the equity market. The Sensex has fallen by over 30 per cent since it touched a peak of 21,113.13 points on January 9.
SLIP’S SHOWING
Average assets under management in June 2008
AUM
(Rs cr)
% chg
Reliance MF 90,813 -8
ICICI Prud MF 59,474 0.7
HDFC MF 52,710.8 -6.05
UTI MF 50,770 -7.1
Birla Sunlife MF 41,075 -0.8
Source: AMFI
ICICI Prudential Mutual Fund attributed its positive numbers to the fact that it is the “largest debt player” in the industry. Vikrant Gugnani, CEO, Reliance Mutual Fund, said the mark-to-market losses were to the tune of Rs 4,000-4,500 crore because of high volatility. The decline in AUMs was also due to redemption from investors for advance tax payments, he added. “We are sitting on cash levels of around 19 to 20 per cent,” added Gugnani.
In spite of the sharp fall in markets, fund players said the industry did not see any serious redemption pressure. “Though a large amount of money has not been coming into equity funds, there has not been any redemption pressure yet,” said Jaideep Bhattacharya, chief marketing officer, UTI Mutual Fund.
However, fund managers expect the next two months to be extremely tight for the industry. They are gearing up for further reduction in AUMs, if the market condition continues to be volatile.
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