Tuesday, May 5, 2009

Mutual Funds Assets Grow by 11.75%

The exceptional performances logged in April by Indian mutual funds have been a boon for the investing community and even more so for the major fund houses, which got ever bigger.

After recording a marginal fall of 1.53 per cent in March average assets under management (AAUM) of mutual funds for April has gone up by 11.75 per cent to reach a total of Rs. 5.5 lakh crore, from the Rs 4.9 lakh crore that it had fallen to.
(Check Out: Top Funds - Assets Under Management)

The reason thereof stems from the fact that both the equity and debt market funds gave one of the historically best monthly returns in April. The BSE Sensex made the decade's best monthly gains of 17.45 per cent, pushing up the diversified equity fund returns to their best in more than 5 years -- a handsome 14.12 per cent one-month return.

On the other hand, medium-term debt funds returned 2.88 per cent while gilt funds returned 3.67 per cent.

Although no new fund offers (NFOs) were happening, the money that was redeemed from the fixed income funds in the first three months of the year came back as investors flocked back into them on these showing better prospects for returns.

The largest of all, Reliance Mutual Fund with an AAUM of Rs 88,388 crore, increased its asset base by 9.17 per cent, followed by HDFC with Rs 63,880 crore and ICICI Prudential with Rs. 56,075 crore. They registered a growth of 10.22 per cent and 8.98 per cent respectively.

However, the growth registered by these big funds paled in comparison to what some others managed. The maximum percentage gain in AAUM was recorded by Baroda Pioneer Mutual Fund, which grew by 66 per cent, while Taurus Mutual Fund and DBS Chola Mutual Fund registered a more-than-impressive increase in their AAUM of 65 per cent and 57 per cent respectively.
(Check Out: The Greatest Gainers and Losers)

On the whole, while 24 fund houses have increased their AAUM by double-digit percentages, four fund houses have actually recorded a fall -- Edelweiss by -34.6%, Benchmark by -12.1%, ING by -6.4% and HSBC by -2.7%.

While the amazing percentage gains lay with the medium-sized fund houses, but the biggest numbers were generated by the big guys of the industry. The largest 10 fund houses accounted for 78 per cent of the total assets of the industry at a combined total of Rs 4.33 lakh crore in AAUM. They cumulatively added Rs. 43,242 crore or 11 per cent to their share.

The only thing missing from the equation to bring the good times back, for the mutual fund industry, are NFOs.

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