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| FMPs lead drop in November assets |
| BS Reporter / Mumbai Dec 05, 2008, 00:53 IST |
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November was much better for the mutual fund industry, compared to October. The average assets under management (AAUM) fell by only 7 per cent or Rs 29,785 crore. In October, AAUM fell by over Rs 97,000 crore. The total AAUM of the industry in November stood at Rs 4,01,987 crore, down from Rs 431,772 crore in October.
Debt funds again led the fall with Fixed Maturity Plans (FMPs) contributing 67 per cent or Rs 19,953 crore. This is the second consecutive month that AAUM of FMPs has fallen. Last month, there was a fall of Rs 10,718 crore.
According to industry experts, institutions and high net worth individuals who had invested in FMPs have been moving out the money because of expectations that the exit load may be increased. Some fund houses such as ICICI Prudential have already hiked their exit loads in some of the schemes to 5 per cent of the net asset value (NAV).
Also, there have been reports that these schemes could be made illiquid by introducing a no-exit clause. That would mean these schemes would have to be listed on the stock exchanges, where an investor would have to exit at a much lower price. (This move has been approved by market regulator Securities and Exchange Board of India On Thursday for all new schemes).
Other categories whose AAUMs fell include liquid (Rs 3,271 crore) and liquid-plus institutional (Rs 2,996 crore). Though equity schemes lost more at Rs 10,441 crore, given that the stock market has been falling constantly, this was expected.
However, there are some schemes that did well. Short-term debt schemes found themselves in favour with investors with a rise in AAUM. For instance, ultra short-term debt and ultra short-term debt institutional schemes gained Rs 4,857 crore and Rs 7,482 crore, respectively. Also, the category of short-term institutional debt gained Rs 2,032 crore.
For the second month in a row, gilt funds saw inflows from investors. Long- and medium-term gilt funds gained Rs 519 crore and short-term gilt Rs 545 crore. As interest rates fall, gilt funds are expected to give better returns.
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