How Are The Stocks Of Fund Houses Rewarding Investors?

Mutual funds have become popular among regular investors in recent years as an effective tool for financial savings and investment. This expanding trend has considerably aided the profitability and growth of asset management companies (AMCs). Taking advantage of this good momentum, four fund houses have floated their shares on the markets. Investors now have the option to invest in the stocks of fund houses. Four fund houses, UTI AMC, Aditya Birla Sun Life AMC, HDFC AMC, and Nippon India AMC, are listed on the bourses. Here we examine how the stocks of these fund houses have fared.

Performance

Analysing the performances over different time frames proved that the fund houses performed relatively better in the last month. UTI AMC was listed at the end of 2022, Aditya Birla Sun Life AMC in mid-2021, while HDFC AMC and Nippon India AMC were listed much earlier.

One-Year Performance Vs One-Month Performance

Starting with the one-year performance, Nippon Life India Asset Management Ltd experienced a decline of 11.77 per cent in share price over the year, with its share price at Rs. 245 on June 12, 2023, reflecting a loss of Rs. 32.70.

HDFC Asset Management Company Ltd, on the other hand, recorded a growth of 7 per cent, with its share price rising by Rs. 127 to reach Rs. 1,940 on June 12, 2023. UTI AMC Ltd displayed a significant one-year performance, achieving a rise of 10.90 per cent as its share price increased by Rs. 70.30, reaching Rs. 715 on June 12, 2023. Conversely, Aditya Birla Sun Life AMC witnessed a decline of 9.19 per cent in its share price, settling at Rs. 374.95 and experiencing a loss of Rs. 38.

But in the last one month, Nippon Life India AMC saw a modest gain of 3.40 per cent in share prices. HDFC AMC Ltd rose by 6.55 per cent, UTI AMC showcased a growth of 9.61 per cent, a rise of Rs. 62.70, and Aditya Birla Sun Life AMC saw a 5.90 per cent increase in share price, rising Rs. 20.85.

Other Time Frames

Over a six-month period, Nippon Life India AMC Ltd witnessed a slight decline of 8.99 per cent, HDFC AMC Ltd faced a more substantial drop of 13.26 per cent, UTI AMC displayed a relatively stable performance with a decrease of 6.45 per cent, and Aditya Birla Sun Life AMC witnessed a significant dip of 17 per cent.

Over a five-year period, UTI AMC excelled with a 42.25 per cent increase (Rs. 212.35) in share price. HDFC AMC gained 11.50 per cent (Rs. 201.10), Nippon AMC rose 13.75 per cent, while Aditya Birla AMC suffered a 46.27 per cent decline (Rs. 322.60 loss).

Conclusion

Despite the impressive 17 per cent compounded annual growth rate of the mutual fund industry, the stock performance of listed players has been underwhelming. Therefore, investors are advised to carefully consider whether it is more beneficial to invest in the stocks of the fund houses or in their schemes that have demonstrated superior performance over the year.