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  • MF News IFAs manage AUM of Rs.3.39 lakh crore in December 2017

    IFAs manage AUM of Rs.3.39 lakh crore in December 2017

    IFAs manage 15% of the total mutual fund assets.
    Padmaja Choudhury Mar 20, 2018

    Of the total Rs.22 lakh crore industry AUM as on December 2017, IFAs manage AUM of Rs.3.39 lakh crore, shows MFDEx data that constitute 96% of the industry. This indicates that IFAs managed 15% of the total assets.

    The assets under advisory (AUA) of IFAs went up from Rs.2.50 lakh crore in January 2017, indicating a growth of close to 40% in AUA or Rs.83,000 crore in 11 months. Experts attribute this both to the mark-to-market gains and increase in retail inflows.

    The data shows that there has been a high absolute increase in AUA of IFAs from T15 cities.  The assets managed by IFAs in T15 cities increased to Rs.2.19 lakh crore in December, from Rs.1.70 lakh crore in January 2017, an increase of Rs.48,790 crore.  

    In percentage terms, advisors operating in B15 locations saw the highest increase in assets. The assets in B15 cities increased from Rs.85,293 crore to Rs.1.19 lakh crore in December.

    G. Pradeepkumar, CEO, Union Mutual Fund, believes that rising AUA of IFAs in B15 cities is due to the presence of IFAs in these locations. “Awareness of mutual funds in B15 areas is increasing due to investor awareness programmes and ‘Mutual funds sahi hai’ campaign. Many investors have now begun to invest in mutual funds in these locations. These investors need handholding by distributors,” he said.

    “Investors have become interested in mutual funds as the rate of interest on fixed deposits and other traditional investment have declined in the past few months. People have become aware that the rate of interest fetched by these investments hardly beats inflation and hence they realise that wealth generation is not possible through FDs. These investors approach us seeking advice on mutual funds,” said Bhilai-based Zian Khan of Omega Financial.        

    With institutions and corporates favouring direct plans to invest in liquid and debt schemes, direct plans account for a substantial share. These are generally not sticky assets as corporates invest in these funds to park their surplus cash for a short period only.

    The assets of national distributors such as Fundsindia, Prudent and NJ, that operate under sub-broking model was next in line after IFAs. The assets managed by national distributors stood at Rs. 2.95 lakh crore on December 2017. It increased by Rs.27,325 crore, or 11%, from January 2017. However, not all national distributors work under the sub-broking model.

    The data shows that the increase in assets of national distributors in B15 cities far exceeded the increase in T15 ones. While the assets in the former increased by 40%, assets in T15 cities increased by 28% only.  

    The assets managed by banks stood at Rs.3.52 lakh crore in December. The private banks managed a higher share—the AUA of private banks was Rs.2.91 lakh crore at the end of 2017.

     

    AAUM Trend by Distributor Category

    Month

    Region

    Direct

    IFA

    National distributor

    PSU bank

    Other banks

    Regional distributor

    Others

    Grand total

    January 2017

    T15

    649,310

    170,410

    245,746

    15,140

    203,054

    44,664

    109,697

    1,438,021

    B15

    40,067

    85,293

    22,905

    16,505

    29,698

    4,521

    26,433

    225,423

    Total

    689,377

    255,703

    268,651

    31,645

    232,752

    49,185

    136,130

    1,663,444

    December 2017

    T15

    840,992

    219,199

    259,408

    26,450

    246,759

    55,191

    185,882

    1,833,882

    B15

    53,108

    119,397

    36,568

    34,150

    44,385

    7,127

    56,675

    351,411

    Total

    894,100

    338,596

    295,976

    60,600

    291,144

    62,318

    242,557

    2,185,293

     

    Difference

    204,723

    82,893

    27,325

    28,955

    58,392

    13,133

    106,427

    521,849

    Difference %

    24

    38

    11

    109

    24

    24

    57

    28

                                                              Source: Cooperative MFDEx Data

    Figures in Rs. crore

     
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