Debt-oriented schemes of the mutual fund industry had a good run in 2012, while equity schemes continued to struggle. Between January and November, the assets under management (AUM) of debt-oriented schemes rose by 26.77 per cent to Rs 5.69 lakh crore. Debt-oriented schemes refer to schemes under the income, liquid/money market and gilt fund categories.

According to the Association of Mutual Funds in India (AMFI), the total assets under management of the industry stood at Rs. 7.93 lakh crore. The asset base of the mutual fund industry as at end November rose by about 20.3 per cent, led mainly by an increase in inflows in the debt fund category.

Equity schemes also grew by 5.4 per cent to Rs 1.65 lakh crore during the same period. However, analysts said that the growth in the equity AUM was largely the result of the stock market action and does not mean an increase in investments in these schemes. But equity schemes continued to see redemptions owing to poor equity markets show.

“Markets have given returns of about 26 per cent this year. However, we have seen two peaks and two troughs in the last five years of the market cycle. Investors who stayed invested through the period have not made money. This is why we saw them redeeming units as they feared that the markets would not hold,” said V. Balasubramanian, Vice-President and Fund Manager, IDBI Asset Management.

The total AUM, however, was volatile as the asset base declined at the end of every quarter, only to rise at the beginning of the next. This was due to money moving out of the system as advance tax payments, said analysts. Therefore, in the months of March, June and September, the AUM dipped by 13.04, 1.5 and 4.3 per cent. Data for the month of December is as yet unavailable.

Rising interest rates pushed up demand for fixed income funds. Mutual fund officials said retail interest in these products also increased as an alternative to equity schemes. The income funds category grew by 30 per cent to Rs 3.87 lakh crore at the end of November. Liquid funds category gained 19.7 per cent to Rs 1.76 lakh crore.

Interest Rate criteria

Towards the end of the year, with interest rates looking to move downwards, fund analysts said the gilt funds and dynamic bonds are increasingly seeing traction. These funds, being long-term funds, tend to do well in a falling interest rate scenario.

Another fund category which saw tremendous amount of retail interest was the gold exchange-traded fund category (ETF). This category grew 23.97 per cent to Rs 11,918 crore between January and November this year.

Of the 44 fund houses in the country, about 12 fund houses saw their assets under management decline this year. The highest loss was seen in case of Sahara Mutual Fund which lost about 73 per cent of its AUM in the first three quarters of 2012. Its assets dwindled to Rs 238 crore as at end September quarter from Rs 909 crore at the end of the January quarter. AMFI discloses fund house AUM data at the end of every quarter.

The top-five fund houses managed to retain their position through the year. HDFC continued to hold fort as the leading fund house in the country with Rs 97,773 crore as its average assets under management (AUM). The average AUM of the fund house was on a steady rise through the year, growing about 8.8 per cent.

The second biggest fund house in the country, Reliance Asset Management, saw its assets grow by 10.5 per cent to Rs 86, 326 crore. Reliance had lost about 19 per cent of its AUM in 2011.

UTI, the fifth largest fund house in the country grew the most at 20.1 per cent to Rs 70,782 crore as at the end of the September quarter. The AUM of Birla Sun Life grew by 19.2 per cent to Rs 72,904 crore. ICICI Prudential’s AUM grew by 11.1 per cent to Rs. 76,387 crore.

> sneha.p@thehindu.co.in

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