Individual investor AUM grew by 12.86% in the last one year ending December 2018, shows AMFI data. Equity investments by individuals grew at a faster pace, 14.82%, adding Rs. 1.14 lakh crore of AUM in the last one year.
Majority of the individual investor AUM is invested in equities (68%) followed by debt (25%), liquid (6%), ETF and FOF (1%).
Individual AUM includes investments of retail and HNI investors.
Analysis of individual investor AUM reveals that distributors drive individual investor investments in mutual funds.
Of the total individual AUM, only 16% is invested directly while the rest has come through distributors. In line with better awareness of mutual funds in metros, we see higher direct investments coming from T30 cities (14%) than B30 cities (2%).
In terms of category, regular plans account for 88% of equity, 58% of liquid and money market, 79% of debt and 22% of ETF & Fund of Fund (FoF) assets of individual investors. While regular plans dominate all asset classes, direct plans are more prominent in the ETF & FoF category.
Distributors bring in 89% of the retail AUM and 79% of HNI investor AUM in the individual asset categoy.
Overall, 41% of the industry’s AUM came through the direct route during the month. Majority of these assets were in debt and liquid schemes, which have higher participation of institutional investors. The liquid and money-market schemes which see highest corporate investments reported 72% of direct flows while the debt category recorded direct investments to the tune of 47%.
Meanwhile, distributors continue to channelise inflows in equity schemes with 84% of industry’s equity investments coming via the regular plans.
A senior fund management official shared that advisors assesses the investor’s profile thoroughly and then recommends investments. Aggressively promoting direct plans without building a framework, which does this kind of through evaluation, is not in the best interest of investors, he said.