In spite of huge volatility, Diversified Equity funds witnessed an inflow of around Rs 139 crore in the quarter under review. However the drop in the stock prices caused the combined AUM of this category to shrink by Rs 95 crore. The top performing equity funds like Franklin Bluechip, Reliance Vision and HSBC Equity fund (please refer the Credence Performance Review QIV 2003-04) with active portfolio churning saw the highest increase of net asset in spite of modest inflows.
Tax Savings Funds, on the other hand, failed to make any splash in spite of this being the last quarter of the fiscal year 2003. The total AUM declined by Rs. 121 crore with the total outflow contributing only Rs 19 crores. The remainder was attributable to depreciation in the market worth by more than Rs 100 crore. Barring Sahara TaxGain 97 and Escorts Tax Plan, no other ELSS
scheme showed a positive change in their net assets. Tata Tax Saving Fund was the new entrant in the top five table of largest ELSS while all the five top diversified equity funds remained same as in the Decâ03 quarter.
Sector funds were the most affected by the choppy stock markets as the category saw a dent in the asset base by Rs 210 crore from the preceding quarter. Out of the 35 sector funds reviewed, only 10 funds attracted inflows (Rs 235 crore) while the rest faced redemption pressure totaling to Rs 260 crore. Technology and pharma funds were heavily dumped by investors while funds with old economy stocks and capital goods regained investorsâ confidence following the IPO series. The resounding success of the ONGC and IPCL public offers, helped UTI Petro Fund climb up to the third slot amongst the top five largest funds replacing Pru ICICI Technology Fund.
Although Balanced Funds, attracted higher inflows (Rs 191 crore) than the diversified equity funds, the category saw a proportionate loss in market appreciation (Rs 664 crore) leading to a drop in the total asset base by Rs 483 crore. Inflows were largely cornered by the UTIâs Children Balanced and Insurance linked plan - ULIP. Balanced funds from HDFCMF and DSP ML MF ranked higher in terms of net asset appreciation. While UTIâs ULIP fund and JM Balanced funds recorded the highest drop in net assets by Rs190 crore and Rs 93 crore respectively.
Monthly Income Plans continued to be in the limelight in Mar'04 quarter, as these plans remained the preferred investment avenue for conservative investors on account of its hybrid nature. This category saw an increase of nearly Rs 3549 crores in its assets base in the quarter largely on account of net inflows of Rs 2778 crores. Only SUN F&C MIP actually showed a decline in net assets because of higher redemption. The top 5 large MIP schemes continued to be the same as in the last quarter. However, FT India MIP on account of good inflows replaced Pru ICICI MIP at the top slot while HDFC MIP LTP jumped one rank ahead of Birla MIP Plan for the 3rd slot.
Higher redemptions than sales resulted in a sharp drop (Rs 11415 crores) in the AUM of Long Term Debt Funds in the quarter under review. Year-end redemptions, growing popularity of MIPs and comparatively lower return from these funds caused a drop in the share of this category in the industry. Although the top 4 debt funds based on net assets continue to hold their ranks, all of them saw a drop in their net assets as compared to the previous quarter. UTI Bond Fund pipped Templeton Income Builder for the fifth slot. Since its launch in early Jan 04, Magnum Institutional Income (highest net addition to asset base) has been consistently witnessing good inflows.
The total AUM under Short Term Debt Funds shrunk by over Rs 4930 crore following an outflow of Rs 4376 crore and drop in market worth by Rs 554 crore. However, the redemption pressure in this category was comparatively lower than their long-term debt counterparts. Barring Chola Freedom (Income) STP all other funds from this category showed a negative growth in asset base. Pru ICICI Short Term Plan (the largest STP fund) reflected the highest drop in net asset of Rs 853 crore with following the largest redemption in the quarter.
The redemption pressure also continued in Gilts Funds. However, the quantum of outflows was substantially lower than the bond funds. Reliance Gilt Securities LTP, Chola Gilt Investment, Templeton India Govt. Sec and Pru ICICI Gilt (IP) showed a drop in AUM of more than Rs 100 crore. However, the outflow pattern in gilts funds were better than the debt funds as more than 50% of the gilts funds witnessed less than Rs 10 crores redemption. Tata Gilt Sec Fund was the
new entrant in the top 5 gilts funds (based on net assets) edging out Reliance Gilt Securities LTP. The latter showed the largest redemption in the quarter.
Liquid Funds continued to be the preferred choice of investment for comparatively steady and higher returns. Fresh inflows combined with the increase in the market value of the investments contributed to the increase in industry share of the Liquid funds in quarter gone by. Liquid funds saw a net asset appreciation of Rs 4,263 crore with Rs 2996 crore inflows. Only 13 out of the 33 Liquid funds reviewed witnessed net redemption in the Marâ03 quarter. JM Liquidity Fund gave way to HDFC Liquid fund for the third place in the top 5 funds based on net assets. HDFC Liquid saw the largest net increase in asset base to the tune of Rs 740 crores in the industry.