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Our Bureau

Mumbai, Feb. 2 Despite the meltdown in the equity markets in January, mutual funds have been able to sustain their asset base.

The assets under management of Indian mutual funds fell only marginally by 0.15 per cent last month while the benchmark Sensex registered a 13-per cent drop.

The total assets under management (AUM) stands at Rs 5,49,114.82 crore as on January 31, 2008 as against Rs 5,49,942.02 crore as on December 31, 2007, down by Rs 827.2 crore, according to the data released by the Association of Mutual Funds in India (AMFI).

“We have seen a trend in the past couple of years that after every market fall, there are new investors who enter the market at lower levels. This time too, while the markets fell sharply, new investors entered at lower levels,” said Mr Arindam Ghosh, Chief Executive Officer, Mirae Asset Global Investment Management (India) Ltd.

Many new fund offers, which opened in December and January, helped the mutual fund industry expand its asset base during January, said a fund manager.

However, of the total 32 fund houses, 17 have registered a decrease in their asset base.

Mutual funds with large equity books have been affected as there were a couple of big IPOs which could have led to some redemption, said Mr Jaideep Bhattacharya, Chief Marketing Officer, UTI AMC.

Although Reliance Mutual Fund maintained its top position, reporting the highest AUM, it saw a decline of 4.4 per cent in AUMto Rs 77,210.03 crore from Rs 80,779.83 crore in December 2007.

ICICI Prudential regained the second slot, replacing UTI AMC. The asset base of ICICI Prudential Mutual Fund grew 12.8 per cent in January 2008, to Rs 64,045.07 crore from Rs 56,772.58 crore in December 2007.

Assets under management of UTI AMC fell by 7.3 per cent during this month as they closed at Rs 52,656.19 crore. HDFC, although maintaining its fourth position, registered a 9.8-per cent drop in asset base. Its AUM now stands at Rs 43,762.69 crore.

“There was fresh participation of retail investors and this, coupled with good liquidity, helped mutual funds build their assets base,” said Mr Mukul K.Gupta, Chief Executive Officer, Birla Sun Life Mutual Fund.

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