MFs' assets rise 0.93% in September

Average assets under management (AAUM) of the mutual fund industry grew 0.93 per cent in September to Rs 7,42,919.67 crore, the slowest growth in the last few months.

Experts said the ban on entry load on mutual fund investments and profit-booking by investors due to rise in stock markets were behind the flat growth of the industry. The top five fund houses saw a minuscule rise in assets with HDFC Mutual Fund, the second-largest fund house in the country, registering a 3.67 per cent drop in assets to Rs 90,427.26 crore from Rs 93,874.19 crore in August.

The assets of Reliance Mutual Fund, the country’s largest, rose 0.79 per cent to Rs 1,18,251.43 crore. HDFC MF continued to be the second-largest fund house, followed by ICICI Prudential Mutual Fund, which saw a growth of 2.76 per cent to Rs 80,119.57 crore .

UTI Mutual Fund’s average assets under management slipped 0.45 per cent, from Rs 7,3925.89 crore in August to Rs 7,3588.79 crore in September. The fifth-largest fund house, Birla Sun Life Mutual Fund, saw its AAUM rise 0.30 per cent to Rs 63,055.86 crore.

Fund houses blamed the drop in growth to a lot of distributors threatening to shun mutual funds after the market regulator banned the entry load for mutual fund investments. The decision had come into effect from August 1. In yet another move, the Securities and exchange Board of India (Sebi) restrained fund houses from charging unit holders different exit loads based on the value of their investments.

In simple terms, it asked fund houses not to discriminate between different classes of investors.

Fund houses had lined up a number of new fund offers (NFOs) to cash in on the “pre no-load” regime. However, distributors said none of the NFOs attracted high interest. “Retail investors are still concerned about the sharp run-up in equity markets. Although the risk apetite is returning, it is not huge,” said a head of a bank-sponsored distribution house.