Change in assets under management, a near-term challenge for AMCs

In the current Covid-19 scenario, investors are more conservative with a rising preference for less risky liquid funds compared to equity

The stocks of two listed asset management companies (AMCs) – HDFC Asset Management Company (HDFC AMC) and Nippon Life India Asset Management Company (Nippon AMC) – have underperformed the broader market in the last one month. While the AMCs’ stocks shed upto 16 per cent over a last month, the BSE Sensex was up around 5 per cent during the same period. A negative impact of the change in assets under management or AUM mix on AMCs’ top-line and earnings is hurting investor interest in these stocks apart from lower equity inflows.

In the current Covid-19 scenario, investors are more conservative