The payment crisis on the bourses and the steep decline in prices the K-10 stocks (which incidentally many mutual funds had bought) burnt a big hole in the net assets of mutual funds. The monthly data of mutual fund released by the Association of Mutual Fund in India (AMFI) reveals the dramatic fall in net assets of mutual funds.

Total mutual fund net assets as on March 31, 2001 have declined sharply by 13.1% to Rs.905 bn from 1,024.4 bn as on February 2001.

Private sector mutual funds had a big setback and saw net outflows for the first time, since mutual fund data started being collated by AMFI. In March 2001 private funds saw total inflows of Rs.86.0 bn whereas outflows amounted to Rs.106.9 bn  a net outflow of Rs.20.9 bn in March. Total assets under management of private funds have come down to Rs.257.3 bn from Rs.306.7 bn in February 2001. Their percentage share of total net assets under management has fallen to 28% from 30% in February 2001.

Unlike private funds, UTI has witnessed net inflows. Total inflows in March amounted Rs.6.5 bn while outflows were Rs.4.3 bn - a net inflow of 2.2bn. A small but significant figure in this market, more so when you look at figures of private funds (i.e. net outflow of Rs 20.9 bn). Also significant is UTI's hike in market share to 64.0% from 62.7% in February 2001.

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