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More than two thirds of the debt AUM of individual MFDs is concentrated in the hands of a small fraction of individual distributors. A report by IDFC MF shows that just 2,300 individual MFDs account for 75% of the total debt AUM of MFDs. These individual MFDs together manage a debt AUM of Rs. 1.10 lakh crore of the total Rs. 1.50 lakh crore AUM.
The top 300 individual MFDs alone account for 40% of the total AUM as they have over Rs. 62,000 crore debt assets under their advisory.
Please note that the report is based on MFDex data by CAMS and captures only around 90% of the industry data.
The report notes that bigger individual MFDs are more likely to recommend debt funds compared to their smaller peers. It shows that the share of debt funds in the total AUM of top 10 MFDs was 55% compared to 22% in the case of top 1001-5000 MFDs.
'MFDs’ debt fund sales take a big hit in FY 2022'
In a year when the equity AUM of individual MFDs registered a significant jump, the debt assets of MFDs mostly remained stable. As per the report, the debt AUM of MFDs grew by only 1% to Rs. 1.50 lakh crore in FY 2022 due to decline in gross sales.
The poor sales figure of debt funds is not just limited to MFDs. Almost all channels have recorded negative net sales due to high redemptions and lower inflows amidst an elevated interest rate risk and poor returns.
During the year, individual MFDs sold debt funds worth Rs. 35,000 crore compared to Rs. 69,000 crore in FY 2021. As a result, individual MFDs witnessed negative net sales at Rs. 21,600 crore in the last financial year as against positive net sales of Rs. 22,530 crore in FY 2021. The net sales figure does not includes cash and ultra-short schemes.
The poor debt fund sales meant that the number of individual MFDs with over Rs. 100 crore debt AUM declined a notch to 205 from 209. The count of MFDs with more than Rs. 10 crore debt AUM also decreased a bit to 2,340 from 2,358.
