In an irony of sorts, foreign players have begun cashing out in a big way from the Indian mutual fund industry when its total asset base is fast nearing Rs 15-lakh crore mark and fund houses are upbeat about future growth prospects with retail investors joining the party.
The performance stands out even better when seen in the context of the equities market not performing so well.
The industry is hopeful of  trebling its AUM to around Rs 40 trillion over the next three years.

Notwithstanding the record show, a number of foreign funds have decided this year to pack up and at least four MNC fund houses - US giant Goldman Sachs, Deutsche Bank Group, Nomura and KBC - encashed their holdings.
While Goldman sold its mutual fund business here to Reliance MF for Rs 243 crore, Deutsche Bank Group sold its asset management business here to Pramerica Asset Managers.
Japan's Nomura decided to call off its JV with LIC and sold 19.3 percent of its 35 percent stake in LIC-Nomura MF to LIC Housing Finance. Belgian fund KBC sold its 49 percent stake in Union-KBC AMC to its domestic partner Union Bank.
In contrast, domestic player Religare sold its 51 percent stake in Religare Invesco AMC to foreign partner Invesco, while Nippon upped its stake to 49 percent in Reliance MF.
The growth came despite the absence of any major push from regulators or the government, except for the salutary impact of the EPFO beginning to invest in the equities market during the year through Exchange Traded Funds (ETF), a mutual fund industry product.
As per the industry body Amfi, 4-7 lakh retail folios are being added to the industry every month.
A major boost came from the decision of the EPFO to increase its play in the equity market. However, the timing was not right as when they started investing, the equity funds were not doing well, forcing it to rethink its plan to invest Rs 6,000 crore by the fiscal-end.
Amfi is also working on the recommendations given by a panel headed by the former finance secretary Sumit Bose which has said fund houses can be allowed to manage those funds currently invested by insurers and pension funds.
One major disappointment came from JP Morgan AMC which was forced to suspend redemption of its investment in the troubled Amtek Auto for more than a quarter and finally forced its investors to redeem at a steep 15 percent discount.

The fund house was forced to exit the segregated assets - JP Morgan India Short Term Income Fund and JPMorgan India Treasury Fund - in full in early December.
Going ahead, the MF industry is banking on the poor performance of other assets classes like gold and real estate to continue to march ahead and they believe it will help them see more retail participation in the next year.


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