Dull market, rising rates erode AUMs of most fund houses

MUMBAI: The Indian mutual fund industry���s dismal run over the last couple of months continued as assets under management (AUMs) of fund houses dipped again in July.

Going by the numbers released by Amfi, which represents the interests of asset management firms, the combined average AUM of the 34 fund houses in the country dropped to Rs 5,29,629.46 crore in July, compared to Rs 5,64,752.76 crore in June.

The 6% drop in AUMs marked the second consecutive month of losses for the industry. June was also bad for the mutual fund industry with AUMs declining by 6%.

This has to do with the downturn in the stock market, which in turn means an erosion in the value of the units of mutual funds also. Their woes have been compounded with the rise in interest rates. High interest rates have made it difficult for banks and corporates to park their surplus cash in income schemes, which has led to them withdrawing funds, said fund managers.

The country���s top fund house, Reliance Mutual Fund, was hit the most with the decline in AUMs at over Rs 6,000 crore last month. Reliance Mutual, which earlier looked set to cross the Rs 1 lakh crore mark in assets, now has assets a shade below Rs 85,000 crore.



However, during the same period, eight fund houses actually gained. These include ABN Amro, Canara Robeco, Lotus India and IDFC. ���Over the past few months, we have been strengthening our sales and distribution systems and the results have been showing through our rising AUMs,��� said Canara Robeco Mutual sales and marketing head Sanjay Santhanam. His AMC���s corpus rose by Rs 643 crore to nearly 4600 crore. He says that among the fund houses that have gained, largest part of the money has come from fixed income schemes such as FMPs, liquid funds and liquid-plus funds.

ABN Amro registered the biggest gain of over Rs 1,000 crore while Lotus India and IDFC AUMs rose by Rs 425 crore and 92 crore, respectively . The pecking order remains unchanged. ICICI Prudential comes second in the table, HDFC third and UTI fourth.

EVAPORATING MONEY

5,29,629

RS CRORE INDUSTRY AUM IN JULY

5,64,752

RS CRORE INDUSTRY AUM IN JUNE

6,000

RS CRORE RELIANCE MUTUAL FUND AUM FELL IN JULY

1,000

RS CRORE ABN AMRO AUM ROSE IN JULY