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MF industry saw its net profits plunge by 50 percent in the financial year 2010-11 as industry expenditure surged 20 percent and equity inflow declined 41 percent.
In the financial year 2010-11, the MF industry saw its net profits plunge by 50 percent even though the revenues declined by a mere 1 percent. Surprisingly, during the same period the MF management fees (excluding PMS fees) saw a marginal decline of 3 percent against the same in the previous year.
Then, what caused the sharp decline in profits?
Industry expenditure rose sharply to Rs 3,405 crore in the fiscal year 2010-11, a jump of 20 percent from Rs 2,837 crore in the previous year. Business promotion /brokerage/fund expense and employee cost have surged 40 percent and 12 percent respectively from the previous year.
In addition, equity inflow has seen a sharp dip (down 41%) during the same period. Overall the industry has seen a net outflow of Rs 49,406 crore as compared to a net inflow of Rs 83,081 crore in the previous year. Meanwhile, during the fiscal year 2010-11, AMCs launched 23 equity funds accumulating Rs 3,299 crore (down 45%) as against the previous year where AMCs launched 19 equity funds and accumulated Rs 5,989 crore.
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|
Rs. Cr |
|
|
|
Mutual Fund Industry |
March-11 |
March-10 |
Change |
|
|
MF Management Fees (excluding PMS) |
3,532.6 |
3,650.3 |
-3% |
|
|
Equity Contribution to Management Fee |
1,049.5 |
1,101.5 |
|
|
|
Debt Contribution to Management Fee |
2,286.8 |
2,260.3 |
|
|
|
Others Contribution to Management Fee |
196.3 |
288.5 |
|
|
|
|
|
|
|
|
|
Income |
4,285.3 |
4,317.1 |
-1% |
|
|
|
|
|
|
|
|
Business Promotion/Brokerage/Fund Expense |
1,022.9 |
729.7 |
40% |
|
|
Employee Cost |
1,285.7 |
1,148.2 |
12% |
|
|
|
|
|
|
|
|
Expenditure |
3,405.5 |
2,837.5 |
20% |
|
|
|
|
|
|
|
|
PAT |
445.3 |
891.8 |
-50% |
|
|
|
|
|
|
|
|
Equity Total AUM |
169,754 |
174,054 |
-2% |
|
|
Total AUM |
592,250 |
613,979 |
-4% |
|
|
Equity % to Total AUM |
29% |
28% |
|
|
|
|
|
|
|
|
|
Equity Net Inflow/(Outflow) |
4,246 |
7,182 |
-41% |
|
|
Net Inflow/(Outflow) |
(49,406) |
83,081 |
|
|
|
|
|
|
|
|
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No. of New Schemes Launched |
518 |
174 |
|
|
|
No. of Equity New Schemes Launched (Nos) |
23 |
19 |
|
|
|
Equity NFO collections |
3,299 |
5,989 |
|
|
|
|
|
|
|
|
|
Total Sales |
8,859,515 |
10,019,023 |
-12% |
|
|
Total Redemption |
8,908,921 |
9,935,942 |
-10% |
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|
Note: We have considered 34 AMC's - excluding those which are new and those AMC's that are yet to report their Annual reports.
Source: AMC Annual Reports, AMFI, Accord Fintech |
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