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Inspite of the rising popularity of direct plans, MFDs have managed to stay strong with a share of 76% in the total SIP collections.
During April-September 2023, the MF industry received gross inflows of Rs 90,312 crore through SIPs, of this, Rs 68,278 crore or 76% has come through regular plans i.e. distributors and the remaining Rs 22,034 crore or 24% through direct plans.
Notably, a month-on-month analysis of industry data shows that this proportion has remained more or less the same.
|
Month |
SIP Contribution |
Regular Plan |
Direct Plan |
||
|
Rs in crore |
Rs in crore |
% |
Rs in crore |
% |
|
|
Apr-23 |
13,728 |
10,581 |
77% |
3,147 |
23% |
|
May-23 |
14,749 |
11,281 |
76% |
3,468 |
24% |
|
Jun-23 |
14,734 |
11,246 |
76% |
3,488 |
24% |
|
Jul-23 |
15,245 |
11,433 |
75% |
3,812 |
25% |
|
Aug-23 |
15,814 |
11,813 |
75% |
4,001 |
25% |
|
Sep-23 |
16,042 |
11,924 |
74% |
4,118 |
26% |
|
Apr-Sep 23 |
90,312 |
68,278 |
76% |
22,034 |
24% |
Ajaykumar Gupta, CBO, Trust MF, said, “Distributors handhold investors and guide them to create a customized portfolio according to their unique needs. Also, they spend quality time spreading financial literacy by educating and nudging investors to exercise discipline and remain commited to investing.”
“Given the crucial role that distributors play in the MF industry, I see the share of regular plans to be strong even going forward”, he added.
Talking about the contribution of direct plans, Neelesh Verma, Product Head, Coin Zerodha stated, “While direct plans are gaining traction, it is only in certain pockets.”
He further said, “There needs to be more awareness among investors about the potential of direct plans to generate more returns than regular plans given their low expense ratio and costs. Also, direct plans depict the new age method of investing. Once their awareness increases and investors adapt to this new age method, the contribution of direct plans is likely to rise.”
Varun Gupta, CEO, Groww MF has a different perspective. He said, “I believe, there are a large number of investors who need guidance and support in order to create wealth via investing and MFDs have played this role well, especially by inculcating a sense of financial discipline in them. Though direct plans have become popular among DIY (Do it Yourself) investors, there will always be investors who will rely on an MFD for guidance and these numbers are a testament to that fact.”
“We are witnessing a revolution where a large number of Indians have started investing in mutual funds and our MFD community has played a pivotal role in making this happen”, concluded Varun.
