MFs to disclose AUMs on quarterly basis from now on

Mutual funds (MFs) will declare their assets under management (AUM) on a quarterly basis, starting from the December quarter, after industry body AMFI decided the existing practice of monthly disclosure of their client base was creating unnecessary competition between fund houses.

"The AAUM for each quarter (90 days average) will be computed and uploaded on AMFI Website on the first working day of the following month of every quarter, effective from the quarter ending December 31, 2010," Association of Mutual Funds in India (AMFI) said.

Industry sources said the AMFI was concerned about some unnecessary competition between players due to monthly disclosure of asset under management (AUM) data. They said the MFs were also resorting to unethical practices to inflate their asset base.

"MF industry is liquidity driven and inflow and outflow of fund cannot be same all the time. So, declaration of AAUM on a quarterly basis is a justified step," a fund manager at an MF house said.

At the end of September, the total average AUM of the 39 fund houses in the country was Rs 7,13,280.78 crore.

The decision to disclose AUM figures on a quarterly basis was arrived at in consensus with all MF industry players.

"After long discussions, it was felt that the average AUM should be declared on a quarterly basis. It is good for the MF sector," Axis Mutual Fund CEO and MD Rajiv Anand said.

The MF industry shrugged off the usual jitters on account of quarter-end withdrawals for the first time since June, 2009, with assets under management rising by 3.7 per cent in September, 2010.

Usually, the MF industry witnesses some redemption pressure at the end of every quarter on the back of hefty fund pull-outs by banks and corporates.

The last time the industry witnessed an increase in AUM in a quarter-ending month was in June, 2009.

At the end of September, the AUM of the country's largest fund house, Reliance MF's assets stood at over Rs 1.07 lakh crore. Reliance MF was followed by HDFC MF (Rs 93,105.58 crore), ICICI Prudential MF (Rs 69,727.52 crore) and UTI MF (Rs 67,617.72 crore).