Mutual Fund Industry Overview

In Jan-Mar quarter, average AUM for the Mutual Fund Industry increased by Rs.25,577 crores i.e. 3.77% from Rs. 6,78,154 crores to Rs.7,03,732 crores. Returns continued to remain comparatively higher in the Liquid and Ultra Short Term category due to higher money market rates as liquidity conditions remained in deficit mode. Gilt and duration funds have also done better during the month as yield softened across the yield curve. Broader equity market ended positive in March where most of sectoral indices gave returns above 7%. Amongst sector indices, Realty was the biggest gainer with ~18% returns during the month.

Change in Jan-Mar Quarterly Average AUM over Oct-Dec quarter

ü  Equity markets ended positive in the month of March as Sensex and BSE 500 were up by 9.1% and 8.57% respectively. However, in the quarter, Sensex was down by 6.58%. The average Equity AUM of the mutual fund industry has decreased further by 8.90% i.e. Rs.18,788 Cr. in absolute terms.

ü  The average Debt AUM has witnessed a fall of 5.62% (excluding liquid and Gilt Funds) i.e. Rs.18,333 crores while Liquid funds has witnessed an increase fall of 61.32% in average AUM i.e. Rs. 62,752 crores.

ü  FMPs have seen inflows during the quarter where the average AUM has risen by 28.14%; i.e. Rs.24,441 crores in absolute terms.

ü  Out of the 41 fund houses; 23 witnessed rise in avg. AUM amounting to Rs.41,000 crores whereas 18 fund houses witnessed a fall in avg. AUM amounting to Rs.15,423 crores.

ü  Of the Net rise in AUM of Rs.25,577 crores in Jan- Mar’11 quarter; top 5 fund houses accounted for Rs.13,532 crores which is 52.90% of Net rise in AUM.

ü  Reliance, HDFC, ICICI Prudential, UTI and Birla continued to retain the top 5 positions in terms of Average AUM. They have witnessed the following changes in average AUM over the Oct-Dec 2010; -0.34%, -1.82%, +11.65%, +2.76% and +10.40%; respectively.

ü  In absolute terms; top 5 rise in AUM is seen in ICICI Prudential, Birla, Kotak, IDFC and Axis Mutual fund to the tune of Rs.7,675 crores, Rs.6,004 crores, Rs.4,611 crores, Rs.3,700 crores and Rs.3,289 crores respectively.

Regulatory and other Key Developments

ü  SEBI puts in place a system to start listing of securitized debt instruments to improve their secondary market liquidity.

ü  SEBI data shows that outflows from debt schemes, mainly liquid funds, dragged down the domestic mutual fund industry's net assets under management by 16.28% on month to Rs.5.92 lakh cr in March.