Moving in a narrow range, the Indian equities displayed marginal gains during April. The frontline indices, the Sensex and the Nifty, gained meagre 0.18% and 0.55%, respectively, in the month. The assets under equity mutual funds rose by 1.31% over the month.
The total average assets under management (AUM) of equity mutual funds stood at Rs2.13 trillion in April. After adjusting the net inflows/outflows, the net rise in assets stood at 1.78%.
Graphic: Yogesh Kumar / Mint
Considering equity funds, only 21 fund houses witnessed a positive growth in their AUM over the month. Canara Robeco Asset Management Co. Ltd topped the chart with a 5.23% jump in its equity assets. Quantum Asset Management Co. Pvt. Ltd with a 5.05% growth in its assets was at the second spot. On the flip side, Benchmark Asset Management Co. Pvt. Ltd again hit the bottom with a 48.62% drop in its AUM. The biggest equity asset holder Reliance Capital Asset Management Ltd’s assets rose by 1.20% while the second largest asset holder HDFC Asset Management Co. Ltd’s assets grew by 2.94% over the month.
Foreign institutional investors (FIIs) continued to be net buyers this month also buying equities to the tune of Rs9,361.3 crore in April. Mutual funds remained net sellers this month, selling equities worth Rs1,411 crore, though selling this month was less than that the last month. The overall trend for the mutual funds remained subdued for the month. Unlike the previous month, mutual funds turned out to be net buyers in the debt market, buying debts to the tune of Rs66,501.6 crore in the month. In contrast, FIIs invested Rs3,032 crore in the debt markets this month.
In a month when equity indices did dismally, some equity fund categories saw their AUM rise, while others recorded a decrease in their assets. Among all the categories, equity-linked saving schemes funds continued to witness the highest rise, with their AUM rising by 4.21%. The giant category, diversified equity funds, also witnessed their assets rise by 1.47% in the month. Index and arbitrage funds, however, saw their assets decline by 10.95% and 11.30%, respectively.
The absolute cash and equivalent proportion declined by 1.7% to Rs9,530 crore in the month from Rs9,696 crore the previous month. The extent of decline in the absolute cash and equivalent proportion remained much lower in the month compared with the past month’s figure of 18.6%. The cash as percentage of total net assets also declined to 5.4% in the month from 5.6% in the earlier month. The decline in the cash level can be attributed mainly to the continued net outflows recorded in the equity funds.
Equity funds that are at least three months old witnessed their cash as percentage of total AUM decrease marginally in April—this is very different from March. The cash and equivalent level of these funds decreased to 5.4% in the month from 5.6% in the previous month.
Though the fund managers seemed emphasizing profit booking this month as well, the cash level declined marginally due to subdued buying along with the outflow witnessed from the funds during the month. The cash level stood at Rs9,529 crore against Rs1.76 trillion worth of AUM.
As in March, all the sectoral funds posted a positive average performance in April. Reflecting the 4.72% gains posted by the Bombay Stock Exchange’s Bankex index, the banking funds topped, registering 6.26% average returns, and displaced March’s top performer, pharmaceutical funds, which offered 1.64% average returns in the month.
HSBC Small Cap Fund remained the top performer among all the equity fund categories, with gains of 12.27% over the month. The fund had a major allocation of 14.14% to the information technology sector, followed by 10.50% allocation towards consumer durables.
Franklin Templeton Asset Management India Pvt. Ltd wound up Franklin India International Fund on 30 April. The strengthening of the rupee against the dollar since the scheme’s launch, which hampered the scheme’s performance profile, resulted in a sharp reduction in the demand for Franklin India International Fund. Hence the trustee and the asset management company decided to cease to carry on any business activities in respect of the scheme.
Sundaram BNP Paribas Asset Management Co. Ltd introduced a weekly systematic investment plan and systematic transfer plan for all the open-ended schemes. These facilities are available for investors since 1 April.