UTI MF's asset size will go up further once it completes the process of acquiring the schemes of IL&FS, which manages AuM of Rs2,090 crore. It is expected that the merger process will be completed by the end of May.

The domestic mutual funds had unleashed aggressive marketing strategy to gain assets during the year. The strategy has paid off and most fund houses have added between 40 per cent and 50 per cent growth in AuM during the year. The industry has grown from Rs 79,464 crore in March 2003 to close March 2004 with total AuM of Rs 1,39,616 crore — 75 per cent growth in one year. This is one of the largest growth in AuM witnessed by MFs.

Most of the fund houses have added AuM during the year. For instance, Reliance MF has seen its corpus grow from Rs2,420 crore in March 2003 to Rs 7,241 crore, while Birla Sunlife MF has grown from Rs5,488 crore to Rs8,873 core. Similarly, HSBC MF saw assets surge from just Rs7,51 crore to Rs4,528 crore during the period.

However, in the last two months of the financial year some outflow was seen in the MF industry. This is because many large investors like banks and corporates have pulled out funds from MFs before the year-end to prop-up their balance sheets. "Every year,
the last two months of the financial year are bad as large investors pull out funds for various reasons," says a mutual fund analyst.