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| Public sector fund houses see rise in market share |
| Vandana / Mumbai Mar 13, 2009, 00:22 IST |
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Public sector fund houses seemed to be the preferred choice for mutual fund (MF) investors in the current financial year. According to Sebi data for the period April 2008 to February 2009, the share of public sector mutual funds in total net assets shot up from 17.79 per cent to 20 per cent. In contrast, private sector mutual funds saw their market share slip from 82.28 per cent to 79.1 per cent.
While the private sector fund houses still account for a lion's share of assets, this is for the second consecutive year that public sector mutual funds have shown an increase in market share. Among public sector AMCs (asset management companies), UTI alone holds 9.58 per cent of net assets. Public sector AMCs include SBI Mutual Fund, Canara Robeco Mutual Fund, LIC Mutual Fund and UTI Mutual Fund. The increase in preference for public sector fund houses became all the more evident in the performance of a single player – LIC Mutual Fund – whose net assets grew by 107 per cent in just four months.
UK Sinha, chairman and managing director of UTI Mutual Fund, explained, "There has been a flight to safety. Investors are increasingly feeling that they are more safe with government-owned entities. And it is not just retail investors, even institutional investors are showing more interest in public sector mutual funds."
The Sebi data threw up some other interesting trends in the mutual fund industry. Private mutual funds mobilised over Rs 38.25 lakh crore compared to Rs 9.81 lakh crore by public sector mutual funds. Additionally, according to experts, the share of the top five mutual funds grew from 51 per cent as of September last year to 57 per cent in February 2009, even as smaller players got marginalised.
Close-ended schemes (equity and debt combined) witnessed net outflows worth Rs 38,541.77 crore, mainly due to redemptions in fixed maturity plans (FMPs) during September and October. FMPs themselves saw withdrawals to the tune of Rs 80,000 crore in September and October, according to Amfi figures.
Gold ETFs saw the least amount of redemptions (Rs 157 crore), but their asset size is quite small at just Rs 780.45 crore. Fund of funds investing overseas were also less impacted compared to other funds as they saw net inflows of Rs 898.71 crore.
ELSS (equity-linked saving schemes) too witnessed a net inflow of Rs 2,420.59 crore due to the tax-investment season in January and February, which attracted fresh inflows.
While there was no net outflow in any scheme in the whole of last financial year (April-March 2008), there had been net outflows this year in almost all schemes barring open-ended schemes which saw money coming in.
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