Huge redemption pressure in the mutual fund industry has received a more authoritative colour as the cumulative assets under management of the country's various mutual fund houses tripped by nearly Rs 10,000 crore (Rs 100 billion) within a month.
The sharp decline in the assets held by mutual funds comes on the back of heavy profit-booking seen on the bourses over the past couple of months and jittery market sentiment that led to investors rushing to withdraw their money from various equity-linked mutual fund schemes.
According to the latest data available with the Association of Mutual Funds in India, the total asset under management of all the funds, excluding the fund of funds, plunged to Rs 2,65,870.86 crore (Rs 2,658.70 billion) in June, from Rs 2,75,948.89 crore (Rs 2,759.48 billion) a month ago.
However, the mutual fund houses have consistently denying any major redemption pressure even if the one-year returns across most of the equity schemes have more than halved from their higher levels in early May.
Out of the total 29 mutual funds, the assets under management (AUM) of 24 fund houses dropped from their month ago levels in June, which included the top mutual funds such as Prudential ICICI, UTI, Reliance and HDFC Mutual Fund, the AMFI data said.
LIC Mutual Fund, HSBC MF, Standard Chartered MF and Principal MF were the only five fund houses that witnessed an increase in their AUM during the month.
However, all the top five fund houses retained their respective positions in terms of their AUMs, with Prudential ICICI leading at the first position, followed by UTI, Reliance, HDFC Bank and Franklin Templeton MF.
Prudential ICICI's AUM stood at Rs 30,142.61 crore (Rs 301.426 billion) at the end of June, down from Rs 32,150.94 crore (Rs 321.509 billion) in the previous month. Pru ICICI had replaced UTI from its long-held position of the country's biggest mutual fund earlier in May.
While, Pru ICICI's AUM dropped by nearly 2,000 crore (Rs 20 billion) in June, the drop was relatively small for UTI, whose AUM dropped by nearly Rs 435 crore (Rs 4.35 billion) to Rs 30,115.31 crore (Rs 301.153 billion) in June from Rs 30,551.01 crore (Rs 305.51 billion) in May.
Reliance MF's AUM dropped to Rs 26,314.44 crore (Rs 263.144 billion) in June, from Rs 27,914.93 crore (Rs 279.149 billion) in the previous month, while HDFC Bank's AUM declined to Rs 24,391.11 crore (Rs 243.911 billion) from Rs 23,649.74 crore (Rs 236.497 billion).
The market observers said the mutual fund houses have started partially diverting their money to debt market to meet the redemption pressures from the investors in the volatile equity market.
Among the mutual funds that registered an increase in AUMs, Standard Chartered, Tata, LIC and HSBC MFs registered a jump of Rs 250 crore (Rs 2.50 billion) to Rs 1,000 crore (Rs 10 billion), while the gain was a marginal Rs 50 crore (Rs 500 million) for Principal MF.
According to the AMFI figures, the AUMs held by fund of funds also dropped to Rs 1,456.08 crore (Rs 14.56 billion) in June, from Rs 1,535.91 crore (Rs 15.359 billion) from the previous month.
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