mutual funds AUMThe mutual fund industry’s average assets under management (AAUM) rose 3.6% in the fourth quarter of fiscal 2019 (Q4 FY19) to Rs 24.51 lakh crore as against a fall of 2.8% in the preceding quarter. However, fiscal year growth of 6% was the slowest in seven years, according to Crisil. Debt funds were the biggest drag to industry growth this fiscal, as the category witnessed outflows of Rs 1.38 lakh crore during the period (April 2018-February 2019).

Debt funds

Assets of debt funds, which account for 45% of the industry’s AAUM, recouped the previous quarter’s decline and were up 2.3%, or by Rs 24,500 crore, to Rs 11.08 lakh crore in the March quarter. Recovery can be attributed to mark-to-market (MTM) gains amid a pullback in yields and as sentiments soothed after the recent credit and liquidity crisis in the debt market. In percentage terms, assets of money market, banking and PSU, and ultra-short duration funds grew in double digits – around 20%, 19% and 15%, respectively.

In absolute terms, liquid funds topped the chart with a Rs 14,500 crore jump. On the other hand, assets of low duration, medium duration, credit risk, short duration and floater funds fell the most in absolute terms among the debt categories. These categories constitute 29% of total debt assets. On a consolidated basis, their average AUM fell by Rs 15,300 crore.

Equity funds

Supported by investors’ interest in equity mutual funds in the form of lump sum and systematic investment plans (SIP) inflows, the category’s average assets rose nearly 6%, or by Rs 36,000 crore, to Rs 6.58 lakh crore in the latest quarter. As per the latest data available from the Association of Mutual Funds in India (AMFI), the category saw net inflows of Rs 9,700 crore during January-February 2019 compared with Rs 30,000 crore of inflows during the previous quarter. The category benefitted from MTM gains.

The equity market, represented by the Nifty 50, surged 7% in the March 2019 quarter compared with a 0.6% fall in the previous quarter. Within the category, AAUM of multi-cap, large cap, ELSS and mid-cap funds witnessed the biggest rise in absolute terms. On a consolidated basis, their AUM (63% of total equity AAUM) jumped by Rs 23,400 crore during the quarter.

Hybrid funds

Hybrid funds, which invest in more than one asset class, saw a small dip in average assets. The category’s average asset base fell 0.8% in the quarter to Rs 3.39 lakh crore. The biggest drag was arbitrage funds’ AUM, which constitutes nearly 16% of the total hybrid assets. The category’s average assets fell 4.5%, or by Rs 2,500 crore, to Rs 52,800 crore. The assets of aggressive hybrid funds (44% of hybrid category assets) retreated 0.7%, or by Rs 1,000 crore, to Rs 1.48 lakh crore. Meanwhile, balanced advantage funds’/ dynamic asset allocation funds’ AAUM rose 3.4% to Rs 85,600 crore (25% of hybrid category assets).

Most AMC assets increase

Top 10 AMC-wise average AUM (in Rs Crore)
Mutual fund Jan-Mar 2019 Oct-Dec 2018 Absolute Change % Change
HDFC 342525 335196 7329 2.19
ICICI Pru 321281 308166 13115 4.26
SBI 284124 264668 19456 7.35
Aditya Birla 246696 242561 4135 1.70
Reliance 234293 236885 -2592 -1.09
UTI 159694 157586 2108 1.34
Kotak 150271 139562 10709 7.67
Franklin 119933 110521 9412 8.52
Axis 89768 81670 8098 9.92
DSP 78363 79245 -882 -1.11
Source – AMFI, AMCs sorted in descending order for the average AUM numbers of March quarter

Of the 42 fund houses (including infrastructure debt funds) that declared AAUM, 30 gained in the quarter. The industry continued to be highly concentrated, with the share of the top five and top 10 fund houses being 58% and 83%, respectively, as of March 2019 – almost the same as in the previous quarter. HDFC Mutual Fund maintained its top position in terms of AAUM in the quarter. Its assets grew 2%, or by Rs 7,300 crore, on-quarter to Rs 3.42 lakh crore. ICICI Prudential Mutual Fund came second with a rise of 4%, or by Rs 13,100 crore, to Rs 3.21 lakh crore. SBI Mutual Fund came in third, with its AAUM rising the highest in absolute terms (up Rs 19,500 crore) to Rs 2.84 lakh crore. Assets of DHFL Pramerica Mutual Fund fell the most in absolute terms, by Rs 3,100 crore or 29% in the quarter to Rs 7,600 crore.

Author
Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. He can be contacted on contact@rupeeiq.com