Falling Equities Can Hit HDFC MF

Beginning of a slide?

- Manish Joshi

DFC Asset Management Co. Ltd (HDFC AMC) saw its actively managed equity assets under management (AUM) benefitting from significant mark-to-market (MTM) gains, which far outpaced fresh flows, contributing to a strong performance in Q3FY25. Actively managed equity AUM is crucial for an AMC, as it generates the highest yield.

For HDFC AMC, the yield on overall equity AUM was 58 basis points (bps) in Q3, higher than the 28 bps from debt and 12 bps from liquid funds. However, the closing equity AUM dropped quarter-on-quarter for the first time in at least seven quarters, to ₹4.79 trillion in the broad sell-off in equity markets. Sure, average actively managed equity AUM rose, but that was because the markets started falling at the end of Q3.