We are pleased to share with you CRISIL Research’s note on Mutual Fund AUM numbers released by AMFI for quarter ended June 2012.

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MF AUM rises for the first time in four quarters

 

The Indian mutual fund industry recorded growth in quarterly average assets under management (AUM) for the first time in the past four quarters. AUM rose by 4% (or Rs 274 billion) to Rs 6.92 trillion in the April-June 2012 quarter from Rs 6.65 trillion in the previous quarter (excluding domestic FoFs) as per the latest numbers announced by the Association of Mutual Funds in India (AMFI). Debt-oriented funds were the key contributors to the rise. Assets of money market funds or liquid funds grew by Rs 169 billion, ultra short term debt funds by Rs 69 billion, fixed maturity plans (FMPs) by Rs 29 billion and other debt-oriented funds by Rs 58 billion over the past quarter. Equity funds witnessed a decline of Rs 53 billion in AUM owing to weak sentiments prevailing in the asset class in the quarter gone by.

 

Chart 1 – Mutual Fund Quarterly Average AUM Trend

 

Source: AMFI

 

29 out of 44 fund houses post rise in average AUM

Two-thirds of the industry (29 out of 44 fund houses) registered a rise in average AUM in the latest quarter. Birla Sun Life Mutual Fund reported the highest rise in absolute terms. Its average AUM rose by Rs 61 billion or 10% to Rs 672 billion in the June quarter. SBI Mutual Fund followed with its average AUM up Rs 51 billion or 12% to Rs 472 billion. Among AUM losers, Fidelity Mutual Fund reported the highest fall in absolute terms of Rs 13 billion or 15% in its average AUM to Rs 74 billion.

 

HDFC Mutual Fund retains its top position

HDFC Mutual Fund maintained its top position by asset size at Rs 926 billion in the June quarter; its assets rose by Rs 27 billion or 3.1%. Reliance Mutual Fund maintained second position with assets of Rs 807 billion (up 3.3% or Rs 26 billion), while ICICI Prudential Mutual fund was third with Rs 730 billion assets (up 6.3% or Rs 43 billion). 

 

The share of the top 5 mutual funds’ average assets stood at 54% in the June quarter while the share of the top 10 funds was 78%. The bottom 10 fund houses continued to occupy less than 1% of the average AUM.

 

Money market funds are key contributors to the AUM rise

Debt-oriented funds, especially money market funds, saw the highest gain in assets across categories, up 11.5% (or Rs 169 billion) to Rs 1.64 trillion in the June quarter, forming 24% of the industry assets. This is the first quarter of gain in assets for money market funds in four quarters and could have been prompted by slight easing in liquidity pressures in the domestic financial system. Liquidity in the banking system has eased due to proactive measures by the RBI to cut interest rates in its annual policy review in April and due to gilt purchases from the open market. The RBI in its annual policy cut its key interest rate, the repo, by 50 bps to 8%, the first cut by the central bank in around three years.

 

Fixed maturity plans (FMPs) continued to find favour among investors, with their average assets steadily increasing in the past eight quarters. In the latest quarter, category assets rose by 2.3% or Rs 29 billion to Rs 1.28 trillion, i.e. 18% of industry assets. High interest rates in the economy over the past two years have benefitted FMPs as investors are able to lock into higher yields.

 

Equity mutual funds’ AUM fell 2.6% in the quarter

Average AUM of equity-oriented mutual funds fell by 2.6% or Rs 53 billion to Rs 1.99 trillion primarily due to weak sentiments prevailing in the asset class in the quarter gone by. Domestic equity markets, represented by the S&P CNX Nifty, fell 0.3% in the quarter amid downbeat domestic and global cues. 

 

Gold ETFs’ average AUM crossed Rs 100 billion mark

Gold exchange traded fund’s (ETFs) AUM rose 5.8% or Rs 6 billion to Rs 101 billion during the quarter ended June 2012 on the back of inflows and rise in gold prices, which rose by 4.5% in the quarter as per the CRISIL Gold Index.

 

Table 1 – Category-wise Average AUM (Rs billion)

 

Mutual Fund Categories	Apr-Jun 2012	Jan-Mar 2012	Change	% Change	Category % Share as of Jun 2012
Equity oriented	1991	2043	-53	-3	29%
Money market	1637	1468	169	11	24%
Ultra Short Term	930	861	69	8	13%
FMP	1280	1252	29	2	18%
Other debt oriented	946	888	58	7	14%
Gold ETF	101	95	6	6	1%
Others	37	40	-3	-8	1%
Total	6922	6648	274	4
Categories as per CRISIL Fund Analyser (CFA) Source: AMFI, CFA

           

 

Table 2 – Top 10 AMCs by Average AUM (Rs billion)

 

Mutual Fund Name	Avg AUM April-June 2012
HDFC Mutual Fund	926
Reliance Mutual Fund	807
ICICI Prudential Mutual Fund	730
Birla Sun Life Mutual Fund	672
UTI Mutual Fund	609
SBI Mutual Fund	472
Franklin Templeton Mutual Fund	355
DSP BlackRock Mutual Fund	300
IDFC Mutual Fund	271

Source: AMFI

 

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For More information please contact Priyadarshini Roy, mobile. no. 9819742778.

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Disclaimer

CRISIL Research, a division of CRISIL Limited (CRISIL) has taken due care and caution in preparing this Report based on the information obtained by CRISIL from sources which it considers reliable (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. This Report is not a recommendation to invest / disinvest in any company covered in the Report. CRISIL especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of this Report. CRISIL Research operates independently of, and does not have access to information obtained by CRISIL’s Ratings Division / CRISIL Risk and Infrastructure Solutions Limited (CRIS), which may, in their regular operations, obtain information of a confidential nature. The views expressed in this Report are that of CRISIL Research and not of CRISIL’s Ratings Division / CRIS. No part of this Report may be published / reproduced in any form without CRISIL’s prior written approval.

 

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