The domestic mutual fund (MF) industry has posted healthy growth in assets under management (AUM) for the quarter ended March 2021. Average AUM for the quarter rose 19 per cent to Rs 32.1 trillion from Rs 27.03 trillion in the March 2020 quarter.
Average AUM for the equity segment during the March 2020 quarter had taken a hint due to selloff caused by the pandemic. However, the growth is still an impressive 14 per cent even if one compares average AUM at the end of January 2020—before the selloff—of Rs 28.2 trillion.
The growth in assets has been underpinned by a sharp up move in the market. In FY21, the benchmark Sensex rose about 70 per cent—its biggest yearly gain in 11 years.
SBI MF has managed to cement its number one place. Its average AUM stood for the March 2021 quarter at Rs 5.04 trillion, up 35 per cent year-on-year, data provided by industry body Amfi shows. The fund house has widened its lead with HDFC MF. A year ago, the both fund houses were neck and neck.
While currently, SBI MF’s AUM is over 20 per cent more than that of HDFC MF.
Among the top 10 players, Axis MF has logged highest growth in average AUM at 42 per cent to Rs 1.96 trillion in Jan-March quarter.
A senior official from SBI MF says that steps taken by the fund house in terms of expanding the business in the last few years have helped them to witness such growth.
“Since 2014-15, we have invested a lot in expanding our reach across the country. We have continued to build new branches and increase the distributors partners. Even our fund performance has improved significantly in the last few years and all these factors have helped us to see such strong growth,” said a top official from SBI MF.
The sharp growth in assets bodes well for the fund house as parent State Bank of India (SBI) is planning to take the company public in the near future.
Industry participants also say that after the debt crisis triggered by the fall of IL&FS in 2018, investors have moved towards larger brands. SBI MF and few other bank-backed fund houses have been one of the big beneficiaries of this trend.
In number two position was HDFC MF with an average AUM of Rs 4.15 trillion, ahead of ICICI Prudential MF at Rs 4.05 trillion.
Franklin Templeton MF’s ranking has slipped to 11 from 9 last year in terms of asset size.
Kaustubh Belapurkar, Director - Manager Research at Morningstar India says, “While certain debt categories towards the shorter end of the curve have seen assets grown towards the second half of the last fiscal. But it was completely different for equity funds. We have seen continuous net outflows from equity, the assets have gone up but it is only due to the surge in equity markets.”
Several of the mid and small size fund houses like PPFAS MF, ITI MF, Quant MF, have seen growth of more than 100 per cent. While Edelweiss MF, Mirae Asset MF, Canara Robeco MF and PGIM India MF among others saw an increase in their average AUM by more than 50 per cent.