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Equity rally swells MFs' assets; Rel MF top gainer

The walk down Dalal Street has become more interesting and profitable over the last one year and mutual fund equity schemes, it seems, have become the preferred mode of investment.

June 04, 2015 / 10:06 PM IST
 
 
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Markets may be volatile now, but over the last one year, Indian equities have been on a firm footing and that has seen retail investors choosing the mutual fund route to park money in shares.


In the 12 months ending April 2015, retail assets under management (AUM) in equity mutual fund schemes have risen a whopping 83 percent to Rs 3.5 lakh crore.


A lot of this extra money has not gone to the Top-10 fund houses, as one would normally expect it to go. So, the share of these 10 mutual funds fell from 52 percent as of April 2014, to 44.60 percent as of April 2015.


However, the leading fund houses have definitely benefited from the increased inflow of funds.


According to Primedatabase, HDFC AMC remains at the top in terms of retail money in equity, but its AUMs rose just 45 percent over the period. This is considerably lower than Reliance MF, which, though at Number-4 in terms of total AUMs, saw a jump of 119 percent.

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The other players -- UTI, ICICI Prudential, and State Bank of India have also seen a healthy rise in AUMs. What is also interesting is that Southern and North-Eastern states have seen more investors choosing to invest in Mutual Funds.


Maharashtra still leads among the states by accounting for 35 percent of the total equity AUM corpus. This, incidentally, is more than the next 5 states put together -- that's Delhi, Karnataka, Gujarat, West Bengal and Uttar Pradesh.


But the four southern states -- that's Andhra Pradesh including Telangana, Tamil Nadu, Kerala and Karnataka together account for nearly 18 percent of total retail AUMs. that's an average growth of 79.43 percent from levels se4en 12 months ago. This is significant, if accounted for the fact that these states make up less than 5 percent of the trading volumes in the equity markets.


Likewise, the 7 sister states in North-East India have seen retail AUMs surge 70 percent in the last 12 months, taking their overall share of total AUMs to 6 percent.


But here's the slightly worrying bit of data.


Prime Database says that nearly 7 percent of the assets under management (AUM) in equity schemes do not meet KYC norms. That's over Rs 23,118 crore. This has been classified under 'Others' category, with fund houses saying they're unable to even determine which city or state these investments originated from. More alarming is the fact that this number is 80 percent higher than it was a year ago.

These equity schemes only account for 26 percent of the MF Industry's Rs 11 lakh crore corpus. Also, the number of retail accounts has fallen to Rs 4.1 crore from the Rs 4.8 crore seen in September 2009. So the MF industry has miles to go before it can rest on its laurels.

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