After debt funds, equity funds have been receiving healthy inflows through direct plans. CAMS data that covers 94% of industry shows that the mutual fund industry has recorded gross sales of Rs.42,800 crore in equity funds through direct plans between January and June 2017.
CAMS collates data from other R&T agents such as Karvy Computershare, Franklin Templeton and Sundaram BNP Paribas to make this report.
On the other hand, the industry has witnessed gross sales of Rs.35,322 crore in equity funds through individual distributors in the first half of 2017.
While direct plan account for 24% of gross sales in equity funds, the IFA channel contributed 20% in the equity gross sales in the first six month of the current calendar year.
Swarup Mohanty, CEO, Mirae Asset MF attributes this to participation of institutional investors in equity through arbitrage funds. “Direct plans have three broad categories – direct retail, direct institutional and direct RIA. A lot of action has been happening in direct institutional and direct RIAs. While many large institutional investors invest in arbitrage funds through direct plans, many RIAs have been recommending their clients to invest in mutual funds through direct plans. However, in my view, gross sales in direct retail is still marginal.”
Gross sales in arbitrage funds during April-August is Rs.30,083 crore. In FY 2016-17, arbitrage funds had received gross sales of Rs.60,464 crore.
However, if we include all the distribution channels such as individual distributors, national distributors, banks and others (robo advisors and overseas distributors), the industry has recorded gross sales of Rs.1.33 lakh crore in equity funds.
Among distribution channels, IFAs top the charts with Rs.35,322 crore gross sales in equity funds. Private banks followed IFAs with gross sales of Rs.35,279 crore in equity funds.
In addition, national distributors recorded gross sales of Rs.26,751 crore in equity funds. Many individual distributors work with NDs like NJ India and Prudent under sub-broking model. The data shows that both - IFAs and NDs account for 38% (20% and 15% respectively) of gross equity sales.
In terms of geographical distribution of gross sales, IFAs recorded highest gross sales in both T15 and B15 cities among distribution channels.
Source: CAMS
Distributor Type |
Gross equity sales |
IFAs |
35,322 |
NDs |
26,751 |
Regional distributors |
4,616 |
PSU Banks |
6,219 |
Other banks |
35,279 |
Direct |
42,800 |
Other |
24,257 |
Total |
1,75,369
|
Source: CAMS
Figures in Rs.crore