The average asset under management (AUM) of mutual funds (MFs) in October increased marginally

RELATED ARTICLES Mutual funds AUM up 16% in April: Crisil

by 1.5 per cent to Rs 755,000 crore, compared with Rs 743,700 crore in September. The increase in average AUM was mainly because of inflow of funds from banks, which pulled out huge amounts at the end of September to meet their capital adequacy ratio ahead of end of the quarter.

Though Reliance Mutual Fund continued to lead the chart with an average AUM of Rs 116,782 crore, it witnessed a drop of 1.24 per cent in average assets in October. Reliance was followed by HDFC Mutual Fund, which saw its average AUM go up by 3.2 per cent to Rs 93,316 crore. Among the other top five asset management companies, ICICI Prudential Mutual Fund’s average AUM rose marginally by 0.5 per cent to Rs 80,554 crore, UTI Mutual Fund registered a 4.5 per cent increase in average assets at Rs 76,847 crore and Birla Sun Life Mutual Fund witnessed a 3.2 per cent increase at Rs 65,072 crore.

Krishnan Sitaraman, head, FundService, Crisil, said, in September, banks and corporate houses pulled out from MFs to meet their capital adequacy ratio and advance tax commitments, leading to a decline in AUM of the industry during that month. “In October, most of the funds pulled out by banks must have come back to mutual funds, leading to the rise in average assets of fund houses. The rise in average AUM is marginal, but the rise in October-end AUM would be substantial compared with September-end AUM,” he added. “Banks and companies park their surplus cash in debt funds, especially liquid funds.”

Shinsei Mutual Fund witnessed the sharpest jump of 142.5 per cent in average AUM during October, followed by 55 per cent of Sahara Mutual Fund and 40 per cent of Taurus Mutual Fund.Sethuraman Iyer, chief investment officer, Shinsei Mutual Fund, said the sharp jump in AUM was mainly because of the launch of its Treasury Advantage Fund, which managed to collect Rs 350 crore.