Mutual fund industry assets drop 5.31 per cent in Oct-Dec

While debt funds have witnessed a huge redemption in December as the corporates have been withdrawing money to meet their advance tax payments,banks have been also redeeming to meet their balance sheet requirements on capital adequacy. Barring DSP BlackRock MF,all other top ten fund houses in the country witnessed a dip in their assets for the quarter.

“The fall in the AAUM is in line with the industry. We have seen a huge outflows on the debt side as well. In the last quarter,liquidity condition in the markets was tight which led to overall withdrawal from the liquid schemes, Birla Sun Life MF CEO A Balasubramanian said. Equity funds had also seen outflows in month of October-November,however in December we are witnessing some smart flows on equity side. Birla Sun Life AMCs assets shrunk by 14.43 per cent to Rs 57,700 crore for last quarter against Rs 67,400 crore in September 2010, he said.

AAUM of several small fund houses like Sahara MF and Shinsei MF saw their assets down by over 50 per cent in October-December quarter. However,some fund houses like Fidelity and DSP BlackRock saw their assets growing in the last quarter. Fidelity MFs assets for the quarter stood at over Rs 8,900 crore gaining by 5 per cent,while AAUM of Benchmark MF was Rs 2,900 crore,up by 17 per cent. As we have been witnessing the continuous redemptions whenever markets are touching high this trend has been quite a worrisome for the industry. Despite markets remaining almost flat in the last quarter,majority of the equity funds have underperformed. Apart from that,distributors are not excited to sell products resulting in investors not buying funds, Dhirendra Kumar,CEO of Value Research said.

However,sources said that the rise in assets for some of the fund houses was seen largely due to the fresh inflows in equity schemes through systematic investment plan (SIP). SBI MF saw its AAUM at over Rs 41,400 crore,down by Rs 600 crore or 1.43 per cent against September,while biggest gainer during the quarter was Pramerica MF as its assets surged by 76 per cent to Rs 1,100 crore,largely due to their new fund offer (NFO) of a equity scheme.

Krishnamurthy Vijayan,MD and CEO of IDBI MF said,In the last quarter the liquidity condition was tight and due to which we saw people staying away from investing in mutual funds. Also,we have to look at inflows in to the equity schemes as flows into the debt funds get redeemed at the end of every quarter.

AAUM of ICICI Prudential MF also has fallen to 5.57 per cent at Rs 65,800 crore where as UTI MF has seen a dip of 3.3 per cent to Rs 65,300 crore for the last quarter.