It is common to classify mutual funds based on performance (say returns over the past five to 10 years) and expense ratios. Some also classify funds based on their investing structure, i.e., open-ended or closed-ended or interval funds.
Currently, investors are rating mutual funds based on their assets under management (AUMs). Undoubtedly, this is an important factor to be considered while parking money in mutual funds. This is because higher capital translates to more opportunities for investment, which is why we find many mutual fund houses investing outside India too.
Fisdom Research recently compiled its findings in “Mutual Fund Industry Factbook – November 2022” and ranked 10 AMCs by their respective AUMs.
|Ranking AMCs based on their AUMs|
|AMC Name||AUM Rank|
Total AUM in September 22
Total AUM in October 22
Month on Month Increase in AUM
|SBI Funds Management Limited||1||6,85,098||7,12,173||4.0|
|ICICI Prudential Asset Management Company Limited||2||4,91,067||5,05,771||3.0|
|HDFC Asset Management Company Limited||3||4,26,892||4,40,933||3.3|
|Nippon Life India Asset Management Limited||4||2,80,282||2,91,204||3.9|
|Kotak Mahindra Asset Management Company Limited||5||2,77,296||2,88,269||4.0|
|Aditya Birla Sun Life AMC Limited||6||2,69,330||2,77,144||2.9|
|Axis Asset Management Company Ltd||7||2,43,420||2,51,159||3.2|
|UTI Asset Management Company Private Limited||8||2,32,207||2,42,870||4.6|
|IDFC Asset Management Company Limited||9||1,16,200||1,18,837||2.3|
|DSP Investment Managers Private Limited||10||1,11,511||1,16,419||4.4|
|Source: Fisdom Research|
SBI Mutual Fund House continues to top the list of asset management companies with its AUM going up on a month-on-month basis. However, it is UTI AMC’s AUM that rose the fastest in contrast to the top 10 AMCs
The AUM of an AMC is often considered an essential parameter by interested investors. Higher AUM size reflects growing interest and trust in that particular AMC with the mutual fund having higher cash reserves to deploy for investments. Higher AUM also means that the fund managers can either buy large stakes in profit-making companies while having enough to put in investible ideas and huge business potential.
The ability to manage the continuously high investment inflow reflects the ability of the management to handle such a large amount of money. It also speaks volumes about the quality of the management that is able to attract such a huge money inflow.
While investors may be in awe of such high AUMs, looks can be deceiving too. More money at disposal does not affect the firm’s profitability. A lot depends on how the assets are managed. Not all fund managers may be adept to handle such a huge amount.