Mutual fund minnows outsmart the giants

NEW DELHI: It's not only the big names that are thriving upon investors' growing preference for mutual funds as the industry minnows have outpaced even the country's top five players in terms of growth in assets.


While the collective asset of fund houses in the country surpassed Rs 3.5 lakh crore mark, adding over Rs 24,000 crore in April, the show was stolen by players like Lotus India Mutual Fund, Taurus, ING Vysya and ABN Amro, which reported a 20-80 per cent growth in their wealth during the month.


In comparison, the top five fund houses, including Reliance, ICICI Prudential and Franklin Templeton recorded less than 12 per cent rise in their assets under management (AUMs).

While a lower base is the major factor behind better growth rates for small players, the analysts believe this should not take the credit away for the success their new fund offerings have met.

Besides, some of the well-known names, including the one-time leader of the market UTI MF, registered a decline in their assets, losing the share to new entrants like Lotus India and Taurus. "The fund houses are growing on a smaller base, that's why a modest increase also shows a huge growth in percentage terms," mutual fund tracking firm Value Research Online CEO Dhirendra Kumar told PTI.

"Smaller mutual funds had launched a slew of NFOs (New Fund Offerings) during the first month of the current fiscal which have led to huge surge in their AUM, said Ashish Kapur of Invest Shoppe, a mutual fund distributor. The base effect was also being reflected on the AUM number, he added.