Mumbai: Assets managed by mutual funds remained largely unaffected by the stock market crash last month, as new investors continued to enter at lower levels in search of buying opportunities, research firm Crisil said on 8 February.
“Of the 32 fund houses, as many as 14 actually registered an increase in assets under management (AUMs) in January,” Crisil FundServices’ head (fund services and fixed income research), Krishnan Sitaraman, said.
Despite the fall in the market, mutual funds were net buyers to the tune of Rs7,700 crore in the secondary market, in January 2008, up from Rs3,000 crore in December 2007, Crisil said its its monthly update on the MF industry.
The total AUM dropped only marginally by Rs2,200 crore (0.4%) to Rs5,52,000 crore as on 31 January, against Rs5,54,000 crore a month ago, despite a sharp correction in equity markets.
The NSE Nifty lost more than 16% in January 2008 over the previous month.
Anil Ambani group’s Reliance Mutual Fund continued to top the AUM sweepstakes in January with an AUM of Rs77,200 crore, followed by ICICI Prudential Mutual Fund (Rs64,100 crore).
UTI MF, which has filed a draft prospectus for an IPO, however, slipped to third position with an AUM of Rs52,700 crore, followed by HDFC MF (Rs43,800 crore) and Birla Sun Life MF (Rs36,000 crore).
Among the top five fund houses, AUMs of ICICI Pru and Birla Sun Life rose by Rs7,300 crore and Rs4,100 crore each. In percentage terms, Lotus India Mutual Fund’s AUM rose 42% during the month to Rs10,100 crore.
However, the returns from equity funds were not encouraging during the month.
Crisis said that three of its mutual fund indices (those with equity components) ended with losses in January 2008, after four consecutive months of positive run.
In comparison, most debt market indices not only ended positive in January 2008, but also largely exceeded the returns in December 2007.
During the month, market regulator Sebi approved removal of charging and amortization of initial issue expenses in close-ended mutual fund schemes. Henceforth, all mutual fund schemes would, therefore, meet expenses connected with sales and distribution of schemes from the entry load.
Consequently, waiver of load for direct applicants would also be available in close ended schemes, Crisil Fund Services said.
Crisil FundServices is a leading provider of fund evaluation and risk solutions to the Indian MF industry.