MF assets soar by 63 in 2006

With the stock markets going through the roof in 2006, mutual funds could not be far behind.

With the stock markets going through the roof in 2006, mutual funds could not be far behind. Total assets under management of 30 funds rose by Rs 125,296 crore, or 63 per cent, to Rs 323,601 crore during the calendar year 2006, according to figures available with the Association of Mutual Funds of India AMFI .

Mutual funds saw record mobilisation as investors lined up to take advantage of the stock market boom. 8220;Most funds gave excellent returns. There were some laggards also. The sustained rise in stocks attracted investors to MF schemes,8221; said an analyst.

Reliance Mutual Fund 8212; controlled by the Anil Ambani group 8212; has toppled Prudential ICICI MF as the country8217;s largest private sector fund house, while UTI MF retained its leading position across both public and private sector funds in December. AUM of Reliance MF jumped to Rs 36,927 crore in December 2006, making it the top private fund. Reliance is followed by Prudential ICICI MF with AUM at Rs 33,304 crore and HDFC MF with Rs 29,635 crore AUM.

UTI MF continued to rule the roost with the highest AUM of Rs 38,108 crore. Said a fund manager with a public sector firm, 8220;Returns from the MF schemes in 2007 would depend on market performance which is likely to be moderate as the base has expanded. Funds, particularly the equity linked schemes, cannot continue to give stellar performance as stock markets might not replicate its past performance.8221; There are at least 20 new schemes waiting on the sidelines to be launched in the first quarter of 2007, with the country8217;s largest fund manager UTI Mutual Fund alone planning to launch about six schemes before the end of March. Out of this, 18 schemes have already been approved by Sebi and many more are currently in the process of getting regulator clearances.

Besides, new entrants like J P Morgan and AIG are slated to start their mutual fund operations by March-April. Many other top global asset management companies like Aegon, Bharti-AXA and UBS have also announced plans for India. Even Vanguard, American Capital, T Rowe Price, Sumitomo Mitsui Asset Management, Daiwa Asset Management and Pioneer are eyeing entry into India.

In December, Japan8217;s leading asset manager Nikko Asset Management formed a joint venture with India8217;s Ambit RSM Finance to float a mutual fund. While the investors are set to get a wider range to choose their mutual fund schemes, the returns on these investments could, however, remain modest depending on the broader market trends.