After allowing distributors to initiate online transactions through TransactEzz facility last month, MF Utility has extended this facility to investors too. This facility will enable investors to invest in direct plans as well as regular plans from 1st January.
A senior industry official confirmed this development. However, he clarified that this is not a new service. “Investors were allowed to transact in direct plans through physical mode since the time MF Utility was launched. Now, the only difference is that we have extended online transaction facility to investors. To avail this facility, investors are required to request us to provide user ID and transaction password. So far, we have received only 263 requests for online transaction facility, which is only 1% of 22,000 common account number (CAN).”
So far, AMCs have been offering online transaction facility in direct plans on their websites. However, investors have to go to each AMC’s website to transact in direct plans. With the launch of MF Utility, all schemes of 25 fund houses will be available at the click of a button.
Direct plans were introduced in January 2013. The investments in direct plans have gone up substantially under both equity and debt funds. Retail assets in direct plans have increased to Rs. 24,326 crore (across all scheme categories) in June 2015, up 34% from Rs. 18,099 crore in June 2014, shows AMFI data. A major chunk of the direct retail AUM is held in equity funds. Of the total Rs. 24,326 crore direct retail AUM, 64% or Rs. 15,497 crore is held in direct plans of equity funds.
Allowing direct investors in MF Utility has created anxiety among some mutual fund distributors. They fear that their existing clients may start investing in direct plans if this facility is provided in MF Utility. However, industry observers say merely facilitation of transaction on MF Utility will not lead to a shift to direct plans.
