Foreign MFs continue to gain ground in India

Foreign mutual fund (MF) houses have continued to do better in 2011-12 in terms of building assets. Their increasing brand equity and investors’ rising comfort have helped them gain at a time when the overall industry continues to struggle.

Foreign players outperformed, adding close to six per cent fresh assets in their kitty during the period. This growth has come amid domestic fund players performing worse than the overall industry as they witnessed a decline of 6.4 per cent in their assets.

Dhruva Chatterji, senior research analyst at Morningstar India, says, “The better performance in terms of asset building of foreign fund houses is partially due to the small base, which is considerably less compared against the industry’s overall assets. Second, last year was a debt game and these players might have benefited out of it.”

For the year ended March 31, the collective average AUM of foreign players stood at Rs 78,436 crore, against Rs 74,037 crore in the previous year. This can be attributed to the total shift of assets of Benchmark Asset Management to the foreign category under Goldman Sachs Asset Management after the latter took over the former last year. Further, a steep rise in assets of JPMorgan AMC, too, helped foreign entities gain ground.

Currently, of 44 fund players in the country, 14 are foreign funds. In India, Franklin Templeton, Fidelity, JPMorgan AMC and HSBC AMC are among the largest foreign fund houses.

Earlier, Puneet Chaddha, chief executive officer of HSBC AMC, had told Business Standard the tilt in growth towards global funds gave a clear sense that investors’ acceptance and comfort with global players was on the rise.