Industry witness rise in folios

Total Assets Under Management (AUM) of Mutual Fund (MF) industry fell 15.20% or Rs 1.12 lakh crore to Rs 6.30 lakh crore in June 2010. This has been the second consecutive month the industry has faced fall in total assets. Total AUM of equity funds had increased 3.86% to Rs 1.78 lakh crore in June as equities turned out to be favorable. BSE Sensex and S&P CNX Nifty had risen 4.46% and 4.45% respectively in June 2010, compared to a loss of 3.50% and 3.63% respectively in May 2010.

The weightage of equity funds increased to 28% of the total assets of the industry in June as against 23% in May. However, this category had a net outflow to a tune of Rs 1446 crore in June as against net inflow in May. Withdrawal by banks and corporates had been the major reason for the decline in assets in June. Banks had withdrawn from schemes to lend it to 3G and BWA bidding. On the other hand, the corporates had withdrawn their money to meet their advance tax payment commitments.

Similarly, equity folios (representing the number of investor accounts) of mutual funds saw a sharp decline of over 1.47 lakh in June. Investors seem to be redeeming equity fund units on the back of rising equity markets and uncertainty over its direction, going forward. The fall in equity folios can be attributed to the fact that investors were moving away from the equity markets. Total equity folios stood at 4.05 crore in June as compared to 4.07 crore in May. However, total folios (including debt and others) saw a marginal increase of 21,350 and were at 4.79 crore in June with most new folios coming into debt schemes. The income/debt schemes folio increased by 190287 in June over May or by 4.92%. In the previous six months (between November to May-end), the number of folios rose a mere 49,153, which in context to June rise of 21,350, clearly show the rising interest of investors in mutual funds.

Fund house wise, the investors gave highest preference to UTI Mutual Fund. The country's oldest fund house in terms of assets crossed the 10-million mark. It also added the largest number of folios–1.18 lakh in June compared to the month of May, when its folio size reduced by 32788. DSP BlackRock Mutual Fund followed it by adding 44821 folios. IDBI AMC and HDFC added more than 20,000 extra folios in June. Peerless contributed zero folios in month of June, whereas SBI Mutual Fund folios fell the most by 49161.

Source: http://www.apollosindhoori.cmlinks.com/MutualFund/MFSnapShot.aspx?opt=9&SecId=10&SubSecId=22,24