AUMs claw back to 2-yr high in Q2 with 8% rise in inflows

Mumbai: The mutual fund industry saw 7.9 percent rise in assets at Rs 7.47 trillion (Rs 7.47 lakh crore) - highest since September 2010 - in the second quarter of the current fiscal, according to Crisil Ratings.

The average assets under management (AUM) for the July- September quarter stood at Rs 7.47 trillion, up from Rs 6.93 trillion in the previous quarter.

"The rise in average assets under management in absolute as well as in percentage terms was the highest since September 2010 quarter, when the AMFI started declaring average AUMs on quarterly basis," Crisil said.

"Rise in the average AUM was primarily due to inflows into income funds, ultra-short term debt funds and money market mutual funds," it said.

Among the debt schemes, the money market, ultra-short term and short-term debt funds together saw a rise of 16 percent in assets to Rs 3.34 trillion during the quarter under review.

"The rise in assets was on account of inflows due to improvement in liquidity situation following the Reserve Bank decision to cut statutory liquidity ratio (SLR) and cash reserve ratio (CRR) during the quarter," the credit rating agency said.

On the other hand, fixed maturity plans that had been witnessing inflows in the past few quarters saw the assets shrinking by 7 percent to Rs 1.19 trillion.

"This is due to decline in new fund offers in this category and higher redemptions that have taken place over the quarter. Peaking of interest rates in the domestic financial markets and other categories looking more attractive have led to decline in the number of new fund offers in fixed maturity plans," it observed.
Equity schemes also witnessed a marginal 2 percent rise in average assets to Rs 2.02 trillion.

"The rise in the category assets under management, which constitutes 27 percent of total assets, was primarily due to positive sentiment prevailing for these asset class. The equity market rose 8 percent in the quarter amid optimistic domestic and global cues. However, growth in equity assets was capped by profit booking," it notes.

The assets under management for gold exchange traded funds that track the precious metal, jumped 5 percent to Rs 10,600 crore due to a rise in the yellow metal prices.

"Gold prices have risen in the quarter led by safe haven buying and strong domestic demand," it said.

Crisil pointed out that out of the 44 AMCs, 34 managed to post a rise in average assets.

The oldest fund house UTI witnessed the highest rise in AUM in absolute terms during the quarter. Its average assets registered a rise of 16 percent to Rs 70,800 crore in the September quarter.

It was followed by Birla Sun Life MF with a jump of 8.5 percent to Rs 72,900 crore.

Against this, BNP Paribas MF saw a fall of 16 percent in assets to Rs 3,800 crore in the quarter.

The largest fund house HDFC Mutual Fund retained its top position, and its assets rose 5.6 percent to Rs 97,800 crore, while Reliance MF maintained the second position with a 7 percent rise in assets at Rs 86,300 crore.

PTI