MFs' assets shrink by over Rs 800 cr in January

Our Stock market meltdown last month led to an erosion of over Rs 800 crore in the total assets of the mutual fund industry by the end of January. Almost all the leading fund houses, except ICICI Prudential, witnessed a drop of Rs 3,000-5,000 crore in their assets led by Reliance MF and UTI MF. The combined assets under management of the 32 fund houses in the country fell to Rs 5,49,114.82 crore in January, against Rs 5,49,942.02 crore at the end of December, 2007, latest data available on the website of Association of Mutual Funds in India show. Assets under Management of the country's largest fund house Reliance MF came down by about Rs 3,500 crore to Rs 77,210.03 crore by the end of the first month of the year from Rs 80,779 crore till December 2007. "The 20 per cent fall in the stock market, drove the shrinking of mutual funds assets for the period. However, the money invested in New Fund Offerings (NFOs), not reflected in the AUM data, could be substantial for the period," Mutual fund tracking firm Value Research CEO Dhirendra Kumar said. However, the second largest fund house in the country ICICI Prudential saw a rise of Rs 7,272.49 crore in its assets, which stood at Rs 64,045.07 crore for January this year. In December, ICICI Prudential's AUM were Rs 56,772.58 crore. State-run UTI MF also witnessed a fall of over Rs 4,000 crore in its assets under management, which stood at Rs 52,656.19 crore at the end of January, compared to Rs 56,854.10 crore in last month of the previous year. Assets of two of the top five fund houses - HDFC MF and Franklin Templeton - stood at Rs 43,762.69 crore and Rs 29,604.33 crore, respectively. HDFC MF recorded a drop of over Rs 4,797 crore, while Franklin Templeton's witnessed a decline of Rs 1,571.21 crore. Meanwhile, the trading pattern of domestic MFs indicate that they have held their nerves in this crisis and purchased shares worth close to Rs 20,000 crore, taking advantage of buying opportunities from falling share prices. In the month of January, MFs were net buyers of equities worth over Rs 5,500 crore, even as they were net sellers to the tune of more than Rs 4,500 crore in the debt market, according to data on SEBI website. The Bombay Stock Exchange's benchmark index Sensex, lost over 2,500 points in January falling to 17,468.71 points on January 31 this year from 20,300.71 on January 1.