Mutual funds are becoming a preferred investment option among retail investors and HNIs, shows the recently published HDFC MF financial report. Share of individual investors in MF assets grew from 44% in March 2014 to 54% in June 2019 overtaking institutional investors.
Individual investors include both retail and HNI investors.
Experts believe that AMFIs ‘Mutual Fund Sahi Hai’ campaign, sustained rally in equity markets between 2014 and 2017, low interest rates and lack lustre performance of real estate helped popularise mutual funds among the masses.
Majority of these individual assets i.e. 57% of the total individual AUM of Rs.14 lakh crore is concentrated among the top five fund houses - HDFC MF, ICICI Prudential MF, SBI MF, Aditya Birla Sun Life MF, Reliance Nippon Life MF. At 15.7%, HDFC MF has the highest market share of individual investor assets. ICICI Prudential MF follows it with 13.6% market share. Typically, individual investors invest in equity mutual funds. Accordingly, the higher market share of HDFC MF corresponds to its higher equity assets. The fund house’s ratio of equity oriented assets and non-equity oriented assets stands at 48:52 in June 2019 compared to the industry ratio of 43:57.
Analysis of Rs. 14 lakh crore individual investor AUM shows that, Rs. 11 lakh crore is from regular plan while Rs. 3 lakh crore from direct plan. In short, direct plans now account for 20% of the individual investor assets in the industry. Anecdotal evidence suggests that majority of the direct assets have come from online investment platforms or RIAs. While we do not have data for June yet, in May 2019, CAMS data (covers 67% of the industry’s AUM) showed that 25% of the total direct assets come from RIAs. This is in line with distribution of total direct assets of the industry (27% individual and 73% institutional)
AUM break-up
|
Individual |
Non-Individual |
|
|||||
|
|
Direct Plan |
Regular Plan |
Total |
Direct Plan |
Regular Plan |
Total |
Total assets |
|
Total |
2,67,000 |
11,17,000 |
13,84,000 |
7,22,000 |
3,19,000 |
10,41,000 |
24,25,000 |
|
% to Total |
27% of total direct assets |
78% of total regular plan assets |
57% of total assets |
73% of total direct assets |
22% of total regular plan assets |
43% of total assets |
|
Source: AMFI, AUM data as on June 30, 2018
