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26% of regular SIP AUM has been active for over 5 years, as against only 14% of direct AUM, as per AMFI data.
“The figures establish the role of distributors in guiding investors to be patient and disciplined”, stated MFD Ritesh Sheth of Tejas Consultancy.
He added, “Through periodic reminders and educational sessions, we nudge investors to have a long-term horizon. In fact, we also evaluate every redemption request to ensure it is genuine and free of emotional bias.”
Notably, of the total SIP AUM of Rs. 6.83 lakh crore, regular plans/distributors have a lion’s share of 83% or Rs. 5.66 lakh crore and direct plans account for the balance of 17% or Rs. 1.17 lakh crore. These numbers further endorse investors’ confidence in distributors.
The data also reveals that the AUM per folio in the case of regular plans is higher than in direct plans. The gap here highlights the absence of direction and handholding in direct investments.
However, investors are now exploring direct investments, as 29% of direct SIP AUM is in new accounts opened in the last one year, compared to 21% of regular SIP AUM.
Commenting on the overall trend, RIA Lovaii Navlakhi, International Money Matters said, “While mutual fund distribution has been around for more than two decades now, direct platforms became popular recently. Hence, if you look at the figures, the gap narrows and the trend shifts towards direct plans as the time horizon reduces.”
He also said, “A bifurcation of the direct figures into investments through RIAs and through platforms would give a clearer picture.”
* Details as on March 31, 2023
