HDFC MF topples Rel MF from top slot

Emerges as the largest fund house in terms of assets under management.

The domestic mutual fund industry is undergoing interesting ups and downs among top players.

HDFC MF has dethroned Reliance MF and emerged as the largest fund house in terms of assets under management. Interestingly, this change happened at a time when Reliance pipped HDFC as the most profitable asset management company.

Statistics from the industry body, the Association of Mutual Funds in India (Amfi), show the average assets under management (AAUM) of Reliance MF plunged in the September quarter by 10.5 per cent to Rs 90,661 crore from Rs 1,01,259 crore in the quarter ending June. On the other hand, HDFC's assets declined marginally by 0.2 per cent during the same period to Rs 91,827 crore from Rs 92,033 crore. During the quarter, the overall industry's assets slipped by 4.2 per cent.

The past year saw HDFC MF lose 1.4 per cent of its assets, while Reliance MF lost a whopping 16 per cent of assets. However, the latter maintained a wide gap from its immediate competitor.

Still, in a single quarter the fund house had a massive erosion of assets to the tune of close to Rs 10,600 crore. This not only lost it the top position but also brought it below Rs 1 lakh crore in assets.

It was in May 2009 that Reliance surpassed the Rs 1 lakh crore mark and maintained this level. Its assets had reached as high as Rs 1.22 lakh crore later that year. HDFC had briefly tasted the Rs 1 lakh crore mark in November 2009 and May 2010. It could not sustain this level.

According to Dhruva Chatterji, senior research analyst at fund tracker MorningStar India, "HDFC MF seems to be a beneficiary because of the rise in its equity assets. Its flagship schemes have been doing well. The fund house has schemes whose equity assets are more than Rs 10,000 crore."

He says some flagship schemes of Reliance MF have done badly. "This could be a temporary thing, as from the long-term perspective, Reliance's schemes have performed well.”

For financial year 2010-11, Reliance MF's profit was the highest at Rs 261 crore, up around 34 per cent compared with Rs 195 crore in the previous year. During the year, the profitability of HDFC MF grew 16.3 per cent to Rs 242 crore, against Rs 208 crore last year.

There are 45 players in the industry, with an average AUM of Rs 7,12,742 crore as on September 30.