AUMs of MFs rise 3% in Aug; FMPs find invt favour

The assets under management, or AUM, of mutual funds are up about 3% month-on-month. While this may not sound big, this is the first possible tick in last three months.

What does this mean for MFs?

3% may not sound as a right number. But after it crossed the Rs 6 lakh crore mark in May, it has been continuously falling largely because of mark-to-market losses that equity funds have been seeing. This is why mutual fund assets have shown a positive growth.

The total assets under management of mutual funds rose 2.9%i n August at Rs 5,44,317 crore,. Data from the Association of Mutual Funds of India showed that Reliance Mutual Fund maintained its numero uno position with a 4.8% month-on-month rise in AUMs at Rs 88,616.4 crore. HDFC Mutual Fund came second with AUMs of Rs 53,859 crore, up 6% MoM. ICICI Prudential fell two ranks to third position with AUMs at Rs 53,092 crore, a fall of 3.7% MoM.

UTI Mutual Fund ranked fourth with AUMs of Rs 46,947 crore, a gain of 1.7% MoM. Birla Sun Life MF maintained its fifth position with AUMs of Rs 38184 crore. It showed a 1.8% gain MoM. SBI MF came in sixth with a 1.4% MoM rise in AUMs at Rs 29,576 crore.

AUM in August

AMC                         AUM (Rs Cr)             Change (%)

Reliance MF              88,616.4                   +4.8

HDFC MF                  53,859                      +6

ICICI Pru                    53,092                      -3.7

UTI MF                      46,947                      +1.7

Birla Sun Life             38,184                      +1.8

SBI MF                     29,576                      +1.4

Franklin Templeton    27,715                       +13

So, which are the categories that have received maximum money in August?

Since interest rates have been relatively higher, equity has not been favoured. A lot of the money has been coming into debt. According to industry estimates, about Rs 1.75 lakh crore of total assests is equity while the rest is debt, or Rs 3.69 lakh crore.

FMPs, or Fix Maturity Plans, were the flavour this season. They garnered a total of Rs 20,000 crore MoM. Experts said total money under FMPs is estimated at Rs 1 lakh crore till August. These are schemes with lock-in periods and investors can take benefit of such schemes if interest rates head higher.

On investor inflows in June-August period:

Al fund houses have seen net inflows between Rs 5 crore to Rs 50 crore daily, which is a significant sign of investors getting a lot mature and not reacting to volatility like what was witnessed in May 2006. At this point, investors are not redeeming units and fund managers are not facing redemption pressures. But experts say that if this volatility continues over a sustained period, investors may start pulling out.

On cash levels of mutual funds:

Cash levels have started increasing from January onwards. January to March, cash levels started increasing from an average 5% among fund portfolios to about 8-10%. That increased significantly in the the March to May period where cash levels went up to as high as 15-20%. At this point, cash levels are still close to about 12-15%. But what fund managers say they don’t mind having cash in their portfolio. They do not want to remain fully invested because they want to save investors from the losses that they are already facing because of current market volatility. A few funds have cash levels as high as 20-22%.

By Pooja Meswani, CNBC-TV18

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