Listen to this article
There are over 13,000 MFDs who have more than Rs. 10 crore worth of assets under advisory. These 13,115 MFDs account for 86% of the total AUM of MFDs, shows a report by IDFC Mutual Fund.
Their share in the total MFD AUM rose 3 percentage points from 83% to 86% in FY 2022.
The data excludes banks, corporate distributors, fintechs, RIAs, national distributors and other direct platforms.
The MFD counts have gone up significantly in every AUM bracket. For instance, the number of MFDs with over Rs. 1,000 crore AUM has doubled in FY 2022 to 36 and the count of MFDs with over Rs. 500 crore AUM has risen 36% to 99.
Please note that the report is based on MFDex data by CAMS and captures only around 90% of the industry data.
The impressive rise in AUM of individual MFDs is a result of multiple factors — an upbeat market (Sensex rising over 18%), rising penetration of mutual funds (industry added over 1 crore new investors in FY 2022) and lower redemptions.
As per MFDs and RIAs, the equity market rally in FY 2022 lured many new investors to join the mutual fund bandwagon. Moreover, the high returns also ensured lower redemptions and word-of-mouth promotion.
"The market rally played a key role in driving up the AUM of MFDs. While mark-to-market gains boosted their AUM directly, the rising returns made it easy to convince new investors and also brought down redemptions," said Mumbai MFD Sadashiv Phene.
"In the last one year, we have seen many existing investors giving referrals after having good experience with mutual funds," Mumbai RIA Vivek Rege of VR Wealth Advisors told Cafemutual recently.
'Bigger MFDs register higher AUM growth'
The highest growth in AUM was seen in the highest AUM bracket of 'more than Rs. 1,000 crore'. The AUM of these 36 MFDs almost doubled to Rs. 65,811 crore from Rs. 33,467 crore, the report showed.
The average AUM of MFDs in the 'more than Rs. 500 crore AUM' bracket was 49%. Similarly, assets of MFDs with 'over Rs. 250 crore AUM' rose 50% during the year.
