Retail investors have poured in Rs.11, 554 crore in equity mutual funds through direct plans, which is 50% of total equity AUM of Rs. 23,216 crore in direct plans as on October 2014.
Contrary to the popular belief that mainly HNIs and corporates invest in direct plans, a Cafemutual study shows that retail participation in direct plans of equity funds is steadily growing.
Retail investors have overtaken institutional investors and HNIs in terms of their investments in equity funds through direct plans, shows an analysis of the direct plan AUM of equity funds of the top ten fund houses.
Retail investors have poured in Rs.11, 554 crore in equity mutual funds through direct plans, which is 50% of total equity AUM of Rs. 23,216 crore in direct plan as on October 2014.
Among the top ten fund houses, UTI has the highest proportion of retail investors investing through direct plans in its equity schemes. Of Rs. 9,366 crore of equity assets in direct plan as on October 2014, Rs. 8,209 crore or 88% came through retail investors.
SBI Mutual Fund has the second highest proportion of 38% or Rs.284 crore of retail participation in equity assets through direct plans.
Fund houses like HDFC, ICICI Prudential, Reliance, Birla Sun Life and Franklin Templeton have over 20% of equity assets in direct plans coming from retail investors.
While HNIs have invested Rs.3,758 crore or 16% in equity funds through direct plans, other institutional investors like corporate houses, banks and FIIs poured in Rs.6362 crore or 27% of total equity AUM in direct plan as on October 2014.
Meanwhile, the contribution of sponsors and associates in equity funds through direct plan stood at Rs.1, 542 crore or 7% of total equity AUM in direct plan.
The study reveals that direct plans are gaining momentum with a faster pace.
Direct plans were introduced in January 2013. The equity AUM has grown by over Rs. 1 lakh crore i.e. from Rs. 1.91 lakh crore as on December 2012 to Rs. 2.97 lakh crore in October 2014.
Of this Rs. 1 lakh crore, Rs. 23,000 crore was invested in equity mutual fund through direct plans in less than 2 years’ time. By factoring in mark to market appreciation, it would be right to assume that a major chunk of money has come through the direct route.
It
remains to be seen if direct plans continue to gain a larger market share in
the days to come.
UTI MF’s clarification on Cafemutual article
UTI Mutual Fund has sent a clarification following the article published on Cafemutual dated December 2, ‘50 percent of the direct plan equity fund mutual fund AUM is Retail’.
The clarification is as follows:
1, Data uploaded on UTI website indicates Average AUM figures, however the article has used the nomenclature as “AUM”.
2. Under Equity Category, UTI MF’s Direct Plan AUM as % of Total AUM constitutes to 0.27%
3. Total Equity Sales since introduction of Direct Plan – Rs.9129.69 crore
4. Total Equity Sales under Direct Plan since introduction of Direct Plan – Rs.881.96 crore
5. Direct Plan Sales as a % of Total Sales – 9.67% (this includes institutional sales)
6. Equity Direct Plan for Retail Investors as % of total sales 2.69 %
7. The data which is shown under Direct Plan AUM on UTI website also includes data which pertains to historical AUM of invalid ARNs and wrong ARNs which exists prior to introduction of Direct Plan. Hence, it may be incorrect to compare the figures uploaded on UTI website under Direct Plan AUM to arrive at a figure of 88% of retail participation in Direct Plan of Equity Funds.
