Assets under management (AUM) of discretionary PMS clients in November have nearly doubled from a month ago chiefly because investments through the Employees provident Fund Organisation/ Provident Fund route doubled.
The AUM figures for discretionary clients have increased to Rs 3.1 lakh crore in November from Rs 1.58 lakh crore in October. Discretionary clients are the ones whose portfolios are completely managed by portfolio managers.
The AUM for discretionary clients includes funds from EPFOs and PFs.
The amount invested through the EPFO/PF route in November increased to Rs 2.75 lakh crore from the Rs 1.21 lakh crore in the previous month. This data is accompanied by “mandate for managing PF funds has been recently renewed by the EPFO” on the SEBI Web site.
“This movement of funds contributed through EPFO/PF is seasonal. April saw huge outflows through the same route. The inflated AUM figures will give a misleading number to people,” said a fund manager.
A similar movement of the funds contributed through the EPFO/PF route was seen in the first half of the year. In March 2011, the AUM for discretionary clients was Rs 2.85 lakh crore. Of this, Rs 2.47 lakh crore was contributed by funds from EPFO/PFs.
In April 2011, the amount contributed through the EPFO/PF route dropped to Rs 92,132 crore, dragging the discretionary AUM down to Rs 1.39 lakh crore from March.
Excluding discretionary clients, the November figures are in line with the expectations of portfolio managers. The number of discretionary clients has reduced marginally to 69,678 in November from 70,524 in October. The number of non-discretionary clients has increased slightly to 4,746 from 4,602 in the same months.
“The markets have been flat and the PMS figures have been in line with the market expectations. Customers are still panicking. The huge increase in the AUM for discretionary clients is only because of the inflow of funds through the EPFO/PF route,” said Mr Hiren Dhakan, Associate Fund Manager, Bonanza Portfolio
Over the last few months, there has also been a consistent increase in the number of advisory clients. SEBI data reveals that the number of advisory clients has increased to 9,339 in November from 9,217 in October.
There has been significant increase in figures on the plain debt side under the discretionary category. The plain debt has increased to Rs 2.83 lakh crore in November from Rs 1.31 lakh crore in October. “All this is only institutional money. The changes are only in platform. There is no significant change in the investment pattern or the AUMs over the last few months,” said a head of portfolio management services with a financial firm.