US subprime crisis hits Indian MFs AUM

Vinay Ranjan

US subprime mortgage crisis, having its impact on  Indian equity market, has led to an erosion of the assets under management (AUM) of the of mutual fund (MF) industry by Rs 18,500 crore in the month of August, 2007. 

According to the data issued by Association of Mutual Funds in India (AMFI) for August shows that the cumulative AUM of the MF industry has come down to Rs 4,67,623.44 crore from Rs 4,86,129.22 crore in July.

According to MF industry analysts, the redemption by the investors on global concerns like  subprime factor and political uncertainty at the domestic front due to the rift within United Progressive Alliance (UPA) has been responsible for the redemption pressures on the fund houses.

Reliance Mutual Fund has retained its top position in the pecking order. Its AUM went up by 1.77% or Rs 1,177 crore to Rs 67,597 crore, from Rs 66,420 crore the previous month.

The AUM of ICICI Prudential Mutual Fund has jumped by 3.95% or 1,923 crore to cross Rs 50,611 crore in August. The fund house maintained its second position.

Though UTI MF could maintain its third position, but its AUM dipped by 2% or Rs 849 crore to Rs 41,698 crore in August from Rs 42,547 crore in July.  The fund house has attributed the outflow of liquid funds and some redumptions by the investors  responsible for this.

Another fund house, HDFC Mutual Fund is picking up fast to match with the asset size of UTI Mutual Fund. HDFC MF’s AUM went up by 1.7% or Rs 718 crore to Rs 40,871 crore in August. Its AUM is just Rs 827 crore less than UTI MF.

Currently, HDFC MF holds fourth position in the industry. Franklin Templeton MF ranked fifth with an AUM  of Rs 29,992.14 crore.