The top mutual fund distributors i.e. those who receive commissions of Rs. 1 crore or more across the industry, earned higher commissions in FY12-13 compared to the previous year on account of robust collections in debt funds. The commission payouts of the top nine AMCs increased by 31% from Rs 1295 crore in FY2011-12 to Rs 1698 core in FY2012-13.
Reliance paid Rs 368 crore in FY12-13 compared to Rs 270 crore in FY11-12. The commission outgo of India’s largest fund house by assets, HDFC Mutual Fund’s went up from Rs 304 crore in FY12 to Rs 337 crore in FY13. ICICI Prudential’s commission payouts too increased 29% from Rs 231 crore in FY12 to Rs 298 crore in FY13.
Similarly, commission outgoes of SBI and DSP BlackRock increased in FY13 compared to the previous year. Birla Sun Life paid out a commission of Rs. 199 crore in 2012-13. (The data on the commission paid by Birla Sun Life in FY2011-12 could not be obtained.)
The highest growth (in percentage terms) in commission payouts was recorded by IDFC (91%) and Kotak (78%). IDFC saw 21% growth in its average assets under management from Rs 27147 crore during Apr-Jun 2012 to Rs 32886 crore Jan-Mar 2013. Similarly, Kotak’s AAUM increased 40% from Rs 25324 crore to Rs 35361 during the same period.
Commissions paid by top AMCs
|
AMC |
FY 12-13 Rs in cr |
FY 11-12 Rs in cr |
Change % |
|
Reliance |
368 |
270 |
36% |
|
HDFC |
337 |
304 |
11% |
|
ICICI Prudential |
298 |
231 |
29% |
|
UTI |
80 |
72 |
11% |
|
SBI |
133 |
84 |
58% |
|
FT |
184 |
129 |
43% |
|
DSP BlackRock |
107 |
101 |
6% |
|
IDFC |
86 |
45 |
91% |
|
Kotak |
105 |
59 |
78% |
|
Total |
1698 |
1295 |
31% |
|
Source: AMC websites |
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Industry experts say that this was largely due to bond funds. Since the commissions on bond funds are usually paid up front, the commission payout was higher last year, say fund officials. While distributors typically earn higher commissions on equity funds, debt funds too have been paying attractive commissions in the range of 1% to 2% lately. “Debt funds, particularly bond funds have been very popular in 2012. Some AMCs paid attractive commissions in schemes with a lock-in period of two to three years,” said a sales head of a bank sponsored fund house.
“AMCs pay good commissions on certain select products which they want to promote, for example, MIPs, tax saving funds, etc. In schemes with a lock-in period of two to three years, the entire commission is paid up front,” says a Mumbai based distributor.
The industry witnessed good traction in debt funds. As per SEBI data, investors poured in Rs 90183 crore in debt funds in FY12-13. The mutual fund industry’s assets under management went up to Rs 7.94 lakh crore in March 2013 from Rs 6.60 lakh crore, primarily due to robust inflows in debt funds.
As per SEBI’s diktat, fund houses have started disclosing additional details about their distributors like whether the distributor is an associate, net inflow from each distributor and the expenses incurred on them.
