In February this year, we ran a set of numbers on AuM growth trends by AMC for the calendar year 2014, titled "Mirror mirror on the wall, who's the fastest of them all" (Click here for summary report), (Click here for asset class wise analysis). The first half of this year is now behind us - we present a half year report card on the same lines, to get early indications on who might be the growth champions of 2015.
The methodology is the same, the groups are the same - to facilitate meaningful comparison. Fund houses have been clubbed into the same 3 groups - Leaders, Challengers and Aspirers. Here is the summary report card for the first half of CY 2015.
The biggest story from this report card is the sharp contrast in AuM growth between the Leaders group and the others. Last year, all 3 groups grew their assets handsomely, and more or less in line with overall industry average. In the first 6 months of this year, the Leaders Group has virtually accounted for almost all the industry growth. Challengers and Aspirers have grown at half the industry growth rate: not a good sign for the industry. To grow less in percentage terms on a smaller base as compared to the Leaders is a clear sign that bulk of the money is flowing into the Leaders Group. The top 10 AMCs account for 80% of industry assets, but as much as 91% of AuM growth in the last 6 months. The situation in the last 3 months has become more acute, with AuM growth of the Leaders coming in at a larger absolute number than the industry - meaning that the top 10 grew while others lost assets.
AuM growth in the last quarter cooled off as compared to the previous quarter, perhaps reflecting market volatility. Out of a total AuM growth of Rs.122,731 crs in 1HY15, only Rs.39,788 came in the last 3 months. Last year, industry assets grew by as much as 26%. With growth momentum in the last quarter sagging a bit, repeating last year's growth record may prove a challenge.
Within the Leaders group last year, the big 4 grew faster than the other 6 in percentage terms. In the first half of this year, there is a catch up of sorts that seems to be happening. Topping the % growth table is Kotak MF, with FT continuing its surge of 2014, with a very healthy growth rate in 1HY15. In absolute terms, ICICI Pru and Reliance MF have gained the most in AuM, followed closely by Birla Sun Life.
The Challengers group is now seeing a sharp divergence, with 6 out of the 10 growing assets while 4 lost AuM during 1HY15. Axis continues is winning ways of 2014 with another robust growth performance, and Tata MF is pulling ahead in the group, giving hot pursuit to Axis.
The Aspirers group performance has been sorted on absolute AuM growth rather than % growth, like it was done for CY14. Motilal Oswal continues to grow at a healthy clip, while Principal MF has surged to the top of the growth table.
Overall, while AuM growth at 11% for the first six months is certainly creditable, concentration of growth at the top is a worry from an industry perspective. Last year's big bull market saw healthy growth across the industry. This year, with growth slowing down a tad, the biggest casualties appear in the smaller companies. Is market volatility causing flows to gravitate towards the top? Or are the new commission norms in some way pushing flows towards the larger players? One can only hope from an industry perspective that what we are seeing in recent months is an aberration, and that the industry will have a more well-rounded report card to show for itself by the end of this calendar year.
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