Mutual funds' AUM up by Rs 21,800 cr in December

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After a gap of three months, the mutual fund industry witnessed an increase in assets under management (AUM) by over Rs 21,800 crore in December, with total AUM rising by 4.6% over that of November 2008. Equity AUM rose 9.5% in the same period due to conversion of cash into equities and fresh inflows into mutual funds, according to an analysis by HDFC Securities based on the data provided by NAV India.

Reliance Mutual Fund has registered the highest growth in total AUM, aided by inflows in debt schemes. AMCs registering the largest fall in AUM in terms of value include Fortis Mutual Fund, Canara Robeco Mutual Fund and Benchmark Mutual Fund.

During the month of December, Franklin Templeton Mutual fund rose from Rank 7 to Rank 6 in terms of total AUM switching places with SBI Mutual Fund, which fell from Rank 6 to Rank 7. In terms of Equity AUM, Sundaram BNP Paribas Mutual Fund rose from Rank 12 to Rank 8, entering into the Top 10 during December 2008.

During 2008, the mutual fund industry's AUM shrank by 24.19 per cent. But on a positive note, during the same year, the industry grew to its biggest size of Rs 6 trillion (Rs 6 lakh crore) in May 2008. While it saw five new fund houses budding on the block last year, two of them have still refrained from any business activity so far.

Funds, which have witnessed an increase in the equity component of their AUMs, include Reliance, Sundaram BNP Paribas, ICICI Prudential fund, UTI and HDFC Mutual Fund. Reliance Mutual Fund continued to be No.1 Mutual Fund in terms of total AUM in December.

An overall study of equity diversified growth mutual funds shows that funds have increased exposure in PSU banks, private banks, construction and power generation sectors. On the other hand, they have reduced exposure in computer software, oil drilling, aluminium and paper sectors, to name a few. In terms of stocks, they have added stocks such as SBI, LIC Housing Fin, REC, Sesa Goa, GVK Power, GMDC etc while cutting exposure to stocks like Infosys, ONGC, Hindalco, Punj Lloyd and MTNL.

Midcap funds have increased exposure to large cap stocks in a volatile period with 5 out of their top 10 holdings being in the large cap space. They have taken fresh exposure to stocks like Apollo Hospitals, Bajaj Auto and Birla Corp, and have reduced exposure to scrips like Srei Infra, Madras Cements, Eveready Industries and Kotak Mahindra Bank.

In a month when the Sensex rose more than 6%, most equity schemes outperformed due to active reshuffling of portfolios and reported higher-than-Sensex rise in their NAVs.

Source-Economic Times
January 2009

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