The average asset under management (AUM) of the MF industry declined nearly 16 per cent to Rs 6,77,615.8 crore in June compared to May. This translates into an absolute decline of Rs 1,27,623.5 crore,which is the highest ever month-on-month decline in absolute terms that the mutual fund industry has witnessed since inception. However, in percentage terms it is the second-highest fall, the highest being (-)18.37 per cent in October 2008. The average AUM stood at Rs 4,32,776.2 crore in October 2008 and it rose to Rs 6,77,615.9 crore (a surge of nearly 57 per cent) in June 2010.
The new guidelines on valuation norms for short-term debt and money market instruments are expected to make returns less predictable. This fear of unpredictable returns has led to corporates withdrawing money from mutual funds. Incidentally, the Securities and Exchange Board of India has (SEBI) has extended the date for the implementation of the new valuation norms to August 1 from July 1. In addition, fund houses faced redemption pressures due to the first instalment of advance taxes that had to be paid by corporates.
The liquid plus category witnessed the highest fall of nearly 34 per cent in its AUM compared to the previous month. The next in line was floating rate short-term category which witnessed a decline of nearly 27 per cent.
In the equity category, the maximum growth in AUM was visible in Equity Phrama, which saw an increase of nearly 12 per cent during the period.
According to data provided by Association of Mutual Funds of India (Amfi), of all the 39 fund houses, JM Financial and Axis Mutual Fund appear to have suffered the largest losses: both their AUMs dipped by around 36 per cent.
Reliance Mutual Fund (the country’s largest fund house by AUM) saw its AUM decline by nearly Rs 17,653 crore, which translates into a nearly 15 per cent drop. HDFC Mutual Fund’s AUM too declined by around 15 per cent compared to the previous month.
Only a few fund houses such as Fidelity, Mirae, Edelweiss and Peerless witnessed an increase in their AUMs. Peerless Mutual Fund registered the highest growth of nearly 12 per cent during the period.
