In June 2011, HDFC Top 200 was the first equity-oriented mutual fund scheme to garner a corpus of over Rs 10,000 crore. Little over a year later, another scheme from the same fund house, HDFC Equity Fund , featured on the list.
During the prevailing volatile market periods, mutual funds struggled to attract assets from retail investors. It took as many as three years for another fund to feature on the list. In March 2015, Reliance Equity Opportunities Fund became the third scheme to join the Rs 10,000-crore-club.
As the market began to rally and retail investor participation increased, the number of equity-oriented funds joining the Rs 10,000-crore-club improved almost every quarter.
As on September 30, 2017, there were as many as 16 schemes (including balanced funds) with a corpus in excess of Rs 10,000 crore. This number may increase as a few schemes are trailing behind by only a few hundred crores.
Equity-Oriented Schemes with Assets above Rs 10,000 Crore
Scheme Name |
Average Corpus (Rs Crore) |
| Sep-12 |
Sep-13 |
Sep-14 |
Sep-15 |
Sep-16 |
Sep-17 |
| HDFC Prudence Fund |
6,033 |
5,151 |
6,745 |
8,559 |
11,412 |
29,593 |
| ICICI Pru Balanced Advantage Fund |
169 |
462 |
3,137 |
8,209 |
13,779 |
20,579 |
| HDFC Equity Fund |
9,887 |
9,679 |
15,638 |
17,807 |
15,875 |
19,889 |
| Aditya Birla SL Frontline Equity Fund |
2,854 |
3,265 |
6,404 |
9,635 |
13,314 |
18,723 |
| HDFC Mid-Cap Opportunities Fund |
2,267 |
2,588 |
6,643 |
10,590 |
12,471 |
17,671 |
| ICICI Pru Value Discovery Fund |
1,985 |
2,534 |
6,063 |
10,150 |
14,044 |
17,238 |
| ICICI Pru Balanced Fund |
344 |
535 |
997 |
2,271 |
3,345 |
17,222 |
| SBI BlueChip Fund |
708 |
690 |
1,070 |
2,528 |
8,038 |
15,317 |
| HDFC Top 200 Fund |
11,591 |
10,294 |
12,800 |
13,190 |
13,024 |
14,942 |
| Axis LT Equity Fund |
264 |
640 |
2,055 |
5,949 |
10,024 |
14,286 |
| HDFC Balanced Fund |
784 |
1,099 |
2,018 |
4,378 |
6,841 |
14,268 |
| ICICI Pru Focused Bluechip Equity Fund |
4,025 |
4,397 |
7,109 |
9,377 |
11,667 |
14,208 |
| SBI Magnum Balanced Fund |
364 |
398 |
825 |
2,355 |
5,940 |
13,914 |
| Kotak Select Focus Fund |
361 |
303 |
889 |
3,198 |
5,668 |
13,074 |
| Franklin India Prima Plus Fund |
1,834 |
1,845 |
2,762 |
5,109 |
9,025 |
11,379 |
| Aditya Birla SL Balanced '95 Fund |
537 |
585 |
887 |
1,707 |
3,672 |
10,453 |
| Reliance Equity Opportunities Fund |
3,830 |
4,715 |
7,994 |
11,595 |
10,904 |
9,801 |
Data as on September 29, 2017
(Source: ACE MF, PersonalFN Research)
Many schemes more than doubled their assets over the past one year. While the growth in assets is related to the underlying market performance, with a bulk of it mainly due to inflows from retail investors.
Consider this, over the past four to five years, the total market-cap of BSE listed companies doubled from about Rs 60 lakh crore in 2012-13 to over Rs 130 lakh crore in September 2017.
During the same period, the equity AUM of mutual funds (including ELSSs ) more than tripled to Rs 6.59 lakh crore in September 2017 from Rs 1.87 lakh crore in September 2012.
In comparison, assets managed by balanced funds grew nearly 8 times to Rs 1.35 lakh crore from 0.17 lakh crore over the same period.
The massive growth in assets is a clear indication of strong retail investor inflows.
Now as investors continue to pump money into mutual funds, should you keep an eye on the burgeoning assets of your mutual fund scheme?
In the past, PersonalFN has highlighted how top performing equity schemes were able to attract strong inflows. But, apart from their performance, some schemes benefited due to a strong distributor push as well. Hence, schemes of larger mutual fund houses are prominent on the list, despite the deterioration in performance over the past few years.
Investors Chasing Past Performance?
Data as on September 29, 2017
(Source: ACE MF, PersonalFN Research)
The common perception among industry experts and some investors is that performance suffers, as the fund size increases, due to liquidity constraints. To deal with liquidity issues, fund managers diversify their assets over a number of stocks or shift towards highly-liquid mega-caps and large-caps.
And even if we dig up some data from the recent past, there is little evidence to substantiate the claim that the fund’s performance will deteriorate due to growth in the fund's corpus. Though larger schemes have suffered bouts of underperformance in the short-term, over the longer term, the performance has recovered.
PersonalFN is of the view that the size of mutual fund schemes doesn't reveal anything about its future performance. The key to a fund’s performance lies in its investment style, which is also a factor of the fund manager's experience and investment processes followed by the fund house.
It is best to assess whether the AUM growth is causing changes to the investment style. Some changes may be in the interest of the investors and some may not. Act before any changes materialise into a disappointing performance.
Many investors pick schemes solely based on past performance. However, achieving historic super-normal returns may be difficult to achieve with an altered investment style. So, you need to take a deeper look. Stick to your fund if you are comfortable with the new investment mandate and ready to tone down on your return expectations, or else move out.
At PersonalFN, we follow stringent research processes that focus on both quantitative and qualitative parameters to offer you a selection of solid schemes with the potential to generate 'market beating' returns.
By subscribing to FundSelect Plus you can benefit from the SEVEN time-tested, readymade equity and debt mutual fund portfolios. Based on your risk profile and investment horizon, you can choose out of four equity portfolios and three debt portfolios. In addition, you get a readymade tax-saving portfolio as well.
Remember, it is your hard-earned money invested in mutual funds with to create wealth. Choose wisely.
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