Quarterly data released by AMFI shows that the average Assets Under Management (AUM) for the last quarter of 2011 have declined by Rs 16,000 crore since the beginning of the year.
The total average AUM for the October to December quarter of 2011 stood at Rs 6, 87,640 crore. This includes the average AUM in the funds-of-funds domestic category. The average AUM in the first quarter of 2011 stood at Rs 7, 03,679 crore.
The total average AUM has declined by Rs 29,765 crore over the last quarter.
“The decline in the average AUM is basically because of the volatility in the equity markets. People seem to be losing patience in the equity market and this has contributed to the decline,” said a fund tracker with an asset management company.
Data released by CRISIL Research on the Mutual Fund industry shows that the fall in the average AUM can be attributed to the “redemption by corporates and banks besides the ongoing slide in the equity market.”
“There has been a decline across the industry. The fresh inflows from retail investors in mutual funds particularly in equity schemes have been less than the redemptions. Fresh inflows from institutional investments have also not been very encouraging,” said Mr Debasish Mallick, MD and CEO, IDBI Asset Management. “Another important reason for the decline is the RBI guidelines linking bank investment in mutual funds to their networth which comes to effect from January 5,” added Mr Mallick.
The top five fund houses of HDFC Mutual Fund, Reliance Mutual Fund, ICICI Prudential Mutual Fund, Birla Sunlife Mutual Fund and UTI Mutual Funds saw a huge combined decline in average AUM. The combined average AUM for these fund houses stood at Rs 3,60,731 crore. This was a combined loss of nearly Rs 31,653 crore over the figures at the end of the January to March quarter.
Average AUM for HDFC Mutual Fund was Rs 88,737 crore. This increased marginally from Rs 86,282 crore in the January to March quarter but decreased from the Rs 91,827 crore in the second quarter of 2011. HDFC Mutual fund was the only fund house to see an increase in the average AUM from the first quarter.
The second highest average AUM was of Reliance Mutual Fund which stood at Rs 84,300 crore in the last quarter of last year. This was a decrease from Rs 92,139 crore in the July to September quarter.
“As many as 24 out of 44 fund houses logged a fall in the average AUM in the December quarter with Reliance Mutual Fund registering the highest fall in average AUM in absolute terms by around Rs 8,400 crore or over 9 per cent to Rs 82,300 crore in the December quarter,” said a research report by Crisil Research.
The average AUM of ICICI Prudential Mutual Fund stood at Rs 69,471 crore followed by Birla Sunlife's Rs 60,406 crore.