Mutual Funds Witness Rise in Investments by Group Companies

Leading fund houses have seen a considerable increase in investments in their schemes by group companies in the first 2 months of the current fiscal year.

HDFC Mutual Fund, the largest fund house, witnessed a 17 per cent rise in investment in its schemes to Rs 6,462 crore by group companies during May.

HDFC Mutual Fund was followed by ICICI Prudential MF (16 per cent) and Birla Sun Life MF (13 per cent) and Reliance MF (12 per cent).

However, UTI MF saw a drop of 2 per cent in investment in its schemes to Rs 3,069 crore by related companies during the period.

Moreover, in April, top 5 fund houses saw an increase in investments in the range of 13 per cent and 60 per cent.

In absolute terms, Birla Sun Life MF saw an investment of Rs 8,072 crore from its related entities in May, ICICI MF (Rs 5,749 crore) and Reliance MF (Rs 4,118 crore).

Overall, Birla Sun Life MF has over 8 per cent of its Assets Under Management (AUM) from investments by group firms followed by HDFC MF (5 per cent), ICICI Prudential MF (4.8 per cent) UTI MF (3.8 per cent) and Reliance MF (3.7 per cent).

The fund houses have been disclosing the exact amount of investments by their group companies in their respective schemes following the Securities and Exchange Board of India (Sebi) directive.

As per Sebi's direction, MFs are required to make monthly disclosure of AUM from different categories of schemes, AUM from places beyond top-15 cities, contribution of sponsor and its associates in AUM and contribution from different types of investors (retail, corporate etc).

The fund houses also need to make disclosures about state-wise contribution and AUM from sponsor group or non-sponsor group distributors on their websites and share the same with AMFI within 7 working days from end of the month.

These rules came into effect from this month.

The norms were recently framed by the market regulator as part of its first-ever long-term policy for the mutual fund industry.