It is evident that, Abrdeen and few others have been consistently selling HDFC AMC.
Though as an individual investor, one should not read much into this and Continue investing, I am curious to know whether this trend will continue for some time.
HDFC AMC has performed better than UTI AMC and ABSL AMC which are listed players, in the past 5 years. Also, it has much higher ROE and ROCE than peers, so it was trading at Median P/E of 40, which has corrected now to below 30. This seems to be a good buying opportunity for Retail investors.
While this is true, it also means that, lot of investors are loosing faith in MF story, and they believe that, in next few quarters, AUM may not increase much as people are unable to save much due to various reasons. Though SIP amounts may look good but those have not increased much in past few quarters due to reduced incomes or various other reasons. There could be pressure on expenses hence people are unable to save higher amounts in Equity MF(s).
Also, I believe that, 5% growth in AUM is much below the expectations. All these AMC stocks were pricing in much higher growth in AUM. If GDP is growing at above 6%-7%, one would expect AUM to grow much higher than this even after considering market correction. Why are the trends changing now? Where are people saving the money? Will these AMC companies not able to grow any where above double digits? if this is the case, I believe that, valuations may undergo some more corrections.
I may be incorrect in my analysis.
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