HDFC Mutual Fund paid the largest commission at Rs. 304 crore followed by Reliance which paid Rs. 270 crore.
HDFC AMC paid the highest commission in the industry- Rs. 304 crore last fiscal, up 6% from Rs. 288 crore paid out in FY 2010-11. Its AUM also increased to Rs. 89,879 crore as on March 2012 from Rs. 86,282 crore in FY11.
In FY 2010-11, the highest commission was paid by Reliance AMC (Rs 330 crore). During FY 2011-12, Reliance paid Rs 270 crore. Its equity assets constitute 32% (Rs 25,107 crore) of its total assets (Rs 78,112 crore).
ICICI Prudential recorded the highest increase in commissions. It paid Rs 231 crore in FY 2011-12, up 59% from Rs. 146 crore in FY 2010-11. This was due to the positive net sales in its equity schemes though its overall assets dropped by Rs 4834 crore last fiscal.
In FY 2010-11, the top 11 AMCs (barring Birla Sunlife AMC) had paid Rs 1333 crore in commissions while in FY 2011-12, the pay outs remained almost the same at Rs. 1362 crore (barring Birla Sunlife AMC).
An AMC’s commission pay outs are correlated with their assets under management and more particularly with equity assets. A rise in assets means AMCs will have to cough up more commissions. The industry’s equity AUM has fallen 7% from Rs 1.70 lakh crore to Rs 1.58 lakh crore in the last fiscal due to mark to market losses. The BSE Sensex has dropped 9% in FY2011-12.
HDFC paid highest commission (Rs. 304 crore) last fiscal as its equity assets constituted 35% (Rs 31,856 crore) of its total assets (Rs 89,879 crore as on March 2012).
“There could be a tweaking in commission structure in some funds. The fall in assets has not affected the top fund houses. They were aggressive in getting business. There are times when assets are shifted from one AMC to another AMC,” says a sales head from a large AMC.
Interestingly, 5 AMCs have witnessed a drop in their assets while their commission pay outs have either remained the same or have gone up. Fund officials say that this could be due to the increased inflows in equity funds or higher upfront commissions in fixed income schemes. “Liquid assets have fallen but the full fee assets have not fallen dramatically. Our full fee assets have also increased even though the AUM change is little lower. Some AMCs are paying commissions almost equivalent to equity schemes in fixed income schemes also,” says a sales head of a mid-sized AMC.
Liquid funds typically witness withdrawals from companies during the end of the quarter. The RBI directive to banks to cut their exposure to liquid funds up to 10% of their net worth has also contributed to the decline in liquid funds AUM. The industry’s liquid fund assets dropped from Rs 2.22 lakh crore in April 2011 to Rs 80,354 crore in March 2012.
Among
these top 11 AMCs, 8 AMCs registered a combined dip of Rs. 52,584 in their
assets while three AMCs added Rs 7566 crore to their kitty.
