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Analysis of July 2023 average AUM data of the top 30 fund houses (in terms of June 2023 quarterly average AUM) reveals that non-associate distributors like MFDs and NDs contribute 27% to the overall average debt AUM i.e. of the total Rs 16.16 lakh crore, they bring in assets of Rs 4.35 lakh crore.
A further review of category-wise numbers shows that they contribute 34% to the total average AUM of other debt schemes which is the highest among other categories. These schemes include conservative hybrid funds, index funds, duration funds, corporate bond fund, banking and PSU fund etc. and exclude liquid/money market, gilt, FMP, debt (assured return) and infrastructure debt funds.
The second-highest contribution is seen in the case of gilt funds, where the share of MFDs and NDs stands at 31%. While liquid/money market schemes follow next with a 19% contribution, the share of non-associate distributors is the least in the case of FMP at 11%.
|
Category |
Total Monthly AAUM (July 2023) |
Share of Non-Associate Distributors |
% |
|
Other Debt Schemes |
8,47,969 |
2,89,615 |
34% |
|
Gilt |
27,172 |
8,546 |
31% |
|
Liquid/ Money Market |
7,21,550 |
1,34,409 |
19% |
|
FMP |
19,604 |
2,249 |
11% |
|
Total |
16,16,295 |
4,34,819 |
27% |
* Figures in crore
Commenting on these figures, G Pradeepkumar, CEO, Union MF said, “Non-associate distributors largely cater to retail investors where the penetration of debt funds is still low. However, there is some level of retail participation in gilt funds and other debt schemes and hence MFDs and NDs have a reasonable participation here.”
He added, “Retail investors normally find gilt funds appealing as they perceive it to be safe from the viewpoint of credit risk.”
Rajiv Shastri, NJ India MF, CEO also shared similar views and stated, “Bulk of liquid/money market investments come from institutional investors who usually invest as a part of their treasury management activities. These investments are generally through direct plans and thus the contribution of distributors is modest here.”
He also said, “As the underlying risk increases, the participation of non-associated distributors also increases. For instance, duration funds are comparatively risky and need expert guidance and handholding.”
