MF Asset Base Slips By Rs 18,506 Cr In Aug

The asset base of the mutual fund industry dwindled by Rs 18,506 crore in August from the levels of the previous month, according to the data released by the Association of Mutual Funds in India (AMFI). The industry now manages Rs 4,67,623 crore in assets compared to Rs 4,86,129 crore in July. Mutual fund managers attribute the decline to a combination of hardening call money rates and volatility in the equity market. The dip of close to four per cent (3.8) has seen most fund houses registering a fall in the net inflows.

But some of the mutual funds with large portfolio of assets under management such as ICICI Prudential, Reliance Mutual and HDFC Mutual showed a net increase. The ICICI Prudential gained Rs 1,923 crore followed by Reliance Mutual Fund, which posted a rise of Rs 1,177 crore, while HDFC Mutual Fund showed a rise of Rs 718 crore last month.

The value of assets under management rose marginally at Rs 7,415 crore. One manager with a leading fund house who preferred not to be identified thought the phenomenon could be due to inflow of funds from the banking industry for short durations of time last month. The fall has been somewhat larger for funds with focus on gilt edged securities. According to fund managers, the change in call rate was the essential factor for the mutual fund industry to see major outflows.