Individual investors prefer regular plans for mutual fund investments

An analysis done by Cafemutual on AMFI AUM data shows that individual investors continue to prefer investing in mutual funds through regular plans. The proportion of regular plan to the total AUM increased from 77% in 2019 to 79% in 2023.

On the other hand, the proportion of direct plans to the total AUM decreased from 30% in 2019 to 26% in 2023.

In absolute terms, while the regular plan AUM went up by 79% in 5 years to reach Rs.19 lakh crore, direct AUM grew by 56% to reach Rs.5 lakh crore between FY 2019 and FY 2023.

Let us look at the table:

Experts attribute this to the efforts of distributors in making people financial aware. Siliguri MFD Chandan Ghosh of Prudent Wealth feels that MFDs plays an important role in handholding clients specially during volatile times. “The data indicates that many direct plan investors have stopped investing during volatile times due to their behavioral biases. This is where MFDs come into picture. MFDs continuously guide investors in the path of wealth creation and help them overcome behavioral biases.”