No monthly data for MFs

In a move that may provide some psychological relief to the domestic mutual fund industry, the Association of Mutual Funds in India (Amfi) has decided not to publish average assets under management (AAUM) on a monthly basis.

From the December quarter, AAUM statistics will be available quarterly. The industry body said, “The AAUM for each quarter (90 days average) will be computed and uploaded on the first working day of the following month of every quarter, effective from the December 2010 quarter.”

The Amfi move has been welcomed by industry players, who feel overemphasis on assets under management leads to unhealthy competition.

Earlier, Amfi Chief Executive Officer H N Sinor had told Business Standard, “The numbers we put out distort the picture to some extent. They are not a true reflection. It is a mistake to talk about assets under management as they depend on the market. I believe retail data depict the right picture.”

Industry chief executives ruled out any major benefit but added it would help them focus on building business for the long term.

A Balasubramanian, CEO, Birla Sun Life Mutual Fund, said, “It is a good move and in line with the practice in the banking industry. We need to focus on fund management for the long term.”

Industry experts said ups and downs in assets were only in the money market (liquid) segment and the retail money did not play a big role. “But sharp volatility on a monthly basis portrays a wrong image of the industry and retail investors may interpret it differently,” said an expert.

“Monthly declaration was bringing unnecessary competition for short-term assets. It was not required as players were getting into the AAUM game,” said Achal Gupta, CEO, SBI Mutual Fund.

Funds taken out by companies and banks at the end of every quarter and oneoff events like the 3G auction were putting pressure on the fund industry.

According to Rajiv Anand, CEO of Axis Mutual Fund, “With quarterly declaration, the ups and downs may even out.” Fund managers added segregation of assets under retail and institutional categories was likely to be the next move.

As of September, the industry’s AAUM stood at over Rs 7 lakh crore, a rise of 3.7 per cent over the previous month.