• Report
  • AUM
  • CRISIL Research
  • Economy Research
  • Mutual Fund
  • Funds Analysis
April 05, 2019

Update on quarterly average AUM of mutual funds

January – March 2019

MF assets up 3.6% in Q4 FY19 against 2.8% fall in Q3, but fiscal year growth slowest in seven years at 6%


The mutual fund industry’s average assets under management (AAUM) rose 3.6% in the fourth quarter of fiscal 2019 (Q4 FY19) to Rs 24.51 trillion as against a fall of 2.8% in the preceding quarter. However, fiscal year growth of 6% was the slowest in seven years. Debt funds were the biggest drag to industry growth this fiscal, as the category witnessed outflows of Rs 1.38 trillion during the period (April 2018-February 2019).


Debt funds rebound in the March quarter


Assets of debt funds, which account for 45% of the industry’s AAUM, recouped the previous quarter’s decline and were up 2.3%, or by Rs 245 billion, to Rs 11.08 trillion in the March quarter. Recovery can be attributed to mark-to-market (MTM) gains amid a pullback in yields and as sentiments soothed after the recent credit and liquidity crisis in the debt market. In percentage terms, assets of money market, banking and PSU, and ultra-short duration funds grew in double digits - around 20%, 19% and 15%, respectively. In absolute terms, liquid funds topped the chart with a Rs 145 billon jump. On the other hand, assets of low duration, medium duration, credit risk, short duration and floater funds fell the most in absolute terms among the debt categories. These categories constitute 29% of total debt assets. On a consolidated basis, their average AUM fell by Rs 153 billion.


Equity assets up at a tepid pace


Supported by investors’ interest in equity mutual funds in the form of lump sum and systematic investment plans (SIP) inflows, the category’s average assets rose nearly 6%, or by Rs 360 billion, to Rs 6.58 trillion in the latest quarter. As per the latest data available from the Association of Mutual Funds in India (AMFI), the category saw net inflows of Rs 97 billion during January-February 2019 compared with Rs 300 billion of inflows during the previous quarter. The category benefitted from MTM gains. The equity market, represented by the Nifty 50, surged 7% in the March 2019 quarter compared with a 0.6% fall in the previous quarter. Within the category, AAUM of multi-cap, large cap, ELSS and mid-cap funds witnessed the biggest rise in absolute terms. On a consolidated basis, their AUM (63% of total equity AAUM) jumped by Rs 234 billion during the quarter.


Hybrid funds lacklustre in March quarter


Hybrid funds, which invest in more than one asset class, saw a small dip in average assets. The category’s average asset base fell 0.8% in the quarter to Rs 3.39 trillion. The biggest drag was arbitrage funds’ AUM, which constitutes nearly 16% of the total hybrid assets. The category’s average assets fell 4.5%, or by Rs 25 billion, to Rs 528 billion. The assets of aggressive hybrid funds (44% of hybrid category assets) retreated 0.7%, or by Rs 10 billion, to Rs 1.48 trillion. Meanwhile, balanced advantage funds’/ dynamic asset allocation funds’ AAUM rose 3.4% to Rs 856 billion (25% of hybrid category assets).


Assets of most AMCs increase


Of the 42 fund houses (including infrastructure debt funds) that declared AAUM, 30 gained in the quarter. The industry continued to be highly concentrated, with the share of the top five and top 10 fund houses being 58% and 83%, respectively, as of March 2019 - almost the same as in the previous quarter.


HDFC Mutual Fund maintained its top position in terms of AAUM in the quarter. Its assets grew 2%, or by Rs 73 billion, on-quarter to Rs 3.42 trillion. ICICI Prudential Mutual Fund came second with a rise of 4%, or by Rs 131 billion, to Rs 3.21 trillion. SBI Mutual Fund came in third, with its AAUM rising the highest in absolute terms (up Rs 195 billion) to Rs 2.84 trillion. Assets of DHFL Pramerica Mutual Fund fell the most in absolute terms, by Rs 31 billion or 29% in the quarter to Rs 76 billion.