MF industry assets rise 3.3% to Rs 6.87 lakh cr in Aug

Snapping the two-month decline, the average assets under management of mutual fund houses rose by 3.30 per cent in August, as eased liquidity situation prompted corporates to park more money with MFs.

The industry's average assets under management (AUM) rose by Rs 21,992 crore, or 3.30 per cent, in August compared to that in the last month. The combined average AUM of 39 fund houses stood at Rs 6,87,559.54 crore at the end of August.

The country's largest fund house Reliance MF saw an addition of Rs 2,332 crore, or 2.28 per cent, to its average assets at Rs 1.04 lakh crore, data by the Association of Mutual Funds in India (AMFI) showed.

Over the month, fund houses continued to buy debt instruments while they sold equities. Also, banks parked money into the MF schemes, which increased the assets managed by them, industry experts said.

The assets of the second largest fund house, HDFC MF, increased to Rs 90,179 crore, a rise of Rs 5,550 or over six per cent over the last month.

"Liquidity situation is easing and a lot of corporate money is flowing into the system. There has been huge inflow in Liquid Funds and Fixed Maturity Plans (FMP)," Kotak MF Head (fixed income & product) Lakshmi Iyer said.

At the end of August, the asset base of ICICI Prudential MF stood at Rs 68,768.63 crore and UTI MF at Rs 64,173 crore.

While, UTI MF's AUM increased by Rs 1,965 crore or 3.16 per cent, ICICI Pru MF managed to add only Rs 53 crore.

The industry has been witnessing a decline in their asset base for two months -- June and July -- on account of withdrawal by corporates and banks.

However, MFs stayed away from equities during August even as stock market barometer Sensex gained 0.6 per cent. Over August, MFs invested over Rs 22,000 crore in debt instruments, while they pulled out Rs 3,169.60 crore from equities.

Industry is witnessing huge redemption in equity schemes. Also fund houses are launching products with fixed income guarantee to attract customers to maintain their asset base, said an executive at a top fund house.

Over the month, the assets of Axis MF increased by Rs 1,018 crore and that of L&T MF by Rs 413 crore. At the end of August, the AUM of Axis MF stood at Rs 4,055 crore and that of L&T MF was at Rs 3,798.89 crore.

Of the 39 fund houses, the assets of as many as 10 funds witnessed a decline during the month. The funds which saw a decline are HSBC MF, Fortis MF, LIC MF and IDFC MF.