Mumbai: Continued volatility in Indian stock markets over the US subprime mortgage crisis all through August has led to a fall in assets of mutual funds in the country by over Rs18,500 crore during the month.
The total Assets under Management (AUM) of 32 fund houses have decreased to Rs4,67,623 crore from Rs 4,86,129 crore in July, latest data from Association of Mutual Funds in India showed.
Reliance MF remains the country’s largest fund house with its AUM increasing to Rs67,598 crore in August as against Rs 66,420 crore in July.
ICICI Prudential MF is at the second rank with AUM of Rs50,612 crore in August, increasing from Rs48,689 crore in July. However, state-run UTI MF witnessed a dip in its AUM to Rs 41,699 crore in August from Rs 42,575 crore previous month.
Other fund houses in the top league are HDFC MF and Franklin Templeton MF with AUM of Rs40,871 crore and Rs 29,992 crore respectively.
The BSE benchmark index Sensex had witnessed a sharp volatility during the past month on concerns related to the US subprime mortgage crisis. The index had dipped below the 14,000 mark in the month, but managed to bounce back to 15,000 level in the last two days of the month.
Analysts, believe the decline in the assets of fund house may be due to the redemptions by investors on concerns of a market meltdown and utilisation of cash pile of mutual funds for making purchases in the bearish markets.
Overall, mutual funds have made net purchases worth Rs4,093.90 crore in August in equity markets. In sharp contrast, foreign institutional investors have been on a selling spree in the domestic markets after the global meltdown. They made net sales worth aroud Rs7,770 crore in August.