AUM Slips By 3.91 Per Cent

The mutual fund industry closed August 2007 with Rs 4.67 lakh crore of assets under management (AUM). This showed a drop down of 3.91% in August 2007 compared with Rs 4.86 lakh crore in July 2007. AUM of fund of funds (FoFs) was Rs 2228.18 crore in August 2007.

Of the 32 mutual funds, 24 registered a decline in AUM in August 2007 over July 2007 and the rest eight showed an addition in their AUM. There were 16 fund houses with AUM above Rs 10000 crore. Eleven of them had a net outflow in August 2007 compared with July 2007.

The top three funds witnessing a rise in the AUM included ING Vysya Mutual Fund (8.61%), Escorts Mutual Fund (4.98%) and ICICI Prudential Mutual Fund (3.95%). Reliance Mutual Fund continued its run as the largest fund house with Rs 67597.65 crore of AUM in August 2007 - a rise of 1.77% over July 2007. It registered net purchases of Rs 1177.62 crore in August 2007 over July 2007. AUM of ICICI Prudential Mutual Fund was at Rs 50611.89 crore in August 2007 - a rise of 3.95% in AUM after a jump of 11.64% in July 2007. It continued to be at the second position.

Occupying the third and fourth slots, AUM of UTI Mutual Fund and HDFC Mutual Fund were Rs 41698.56 crore and Rs 40871.49 crore, respectively. AUM of UTI Mutual Fund decreased by 2.00%, where as AUM of HDFC Mutual Fund increased by 1.79%, in August 2007 over July 2007.

The other top mutual funds, in terms of AUM were Franklin Templeton Mutual Fund AUM (Rs 29992.14 crore), Birla Sun Life (Rs 27058.49 crore) and SBI Mutual Fund (Rs 22049.32crore) in August 2007.

Kotak Mahindra Mutual Fund recorded the second highest net outflow of Rs 3597.15 crore in August 2007, after SBI Mutual Fund, which secured its top position with an outflow of Rs 3829.14crore, followed by DSP Merrill Lynch Mutual Fund and Franklin Templeton Mutual Fund, with a net outflow of Rs 2603.69 crore and Rs 2221.70 crore, respectively.

ICICI Prudential Mutual Fund recorded the highest inflow of Rs 1923.34 crore in August 2007. Reliance Mutual Fund followed with a net inflow of Rs 1177.62 crore.

Tightening liquidity conditions in the market in the month of August and volatile equity markets made banks and corporates to reduce their exposures to mutual funds. This formed the major reason of fall in AUM of mutual fund industry in August 2007.