Equity AUM of top 10 fund houses declines by 8 percent

Of the top 10 AMCs, only 2 fund houses, ICICI Prudential and IDFC recorded a positive growth in equity AUM from September 2012 till September 2013.

Equity AUM of top 10 fund houses saw a decline of 8% from Rs 1,50,336 crore to Rs 1,38,870 crore, a fall of Rs 11466 crore, during the period September 2012 to September 2013 despite an overall rise of 8% in AAUM of industry. 

Fund officials attributed this decline to redemption pressure and net outflows in the equity funds. The S&P BSE Sensex rose by 3.2% or 600 points during the period.

India's largest fund houses, HDFC MF and Reliance MF saw decline of Rs 2226 crore (7%) and Rs 2876 (12%) respectively in equity corpus.  DSP BlackRock also saw its equity AUM dipping by 21% or Rs 2255 crore during the same period.

DP Singh, CMO, SBI MF points out that those fund houses which had garnered maximum inflows in their equity funds during 2007-08 run are the worst affected during September 2012 to September 2013 since these investors were looking to break even and exit. Agreeing with this view, a fund official from a leading fund house said that investors have redeemed their investments after the market started its recovery after a long gap. “We have observed that fund houses witness redemption pressure whenever Sensex goes up resulting in net outflows from equity funds.”

A senior fund official from a top fund house said that many investors were exiting equity funds after booking profit. Also, investors preferred the relative stable returns from debt funds or tax free bonds.

Here is the table showing change in equity AUM of top ten fund houses

Of the top 10 fund houses, only two fund houses – ICICI Prudential MF and IDFC, witnessed growth of 1% and 11% respectively in their equity AUM during the period. ICICI Prudential MF has recorded an inflow of Rs 121 crore whereas IDFC MF added an additional Rs 579 crore in its equity funds from September 2012 to September 2013.

Kalpen Parekh, CEO IDFC MF attributes this growth in equity funds to better performance of fund managers and co-ordination with advisers. He says, “Most of our equity funds are in top quartile since our funds have delivered good returns to investors during the period. Hence, we have not witnessed any redemption pressure. In fact, our IDFC Equity Opportunity fund which we had launched on April 2013 has garnered around Rs 250 crore”