Indian Mutual Fund Industry Trends Report Card for May 2016

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AUM-MF-Industry

AMFI has started to disclose some additional data related to Mutual Fund investments from October, 2015. Today, we look at a snapshot of this data:

14.5 Lakh Crores in Mutual Funds Assets managed by the MF Industry has increased from Rs. 10.7 lakh crore in Oct-14 to Rs. 14.5 lakh crore in May-16 with Debt funds taking the most investment at 45 paise of every rupee invested.

Assets Growth Mutual Fund

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Here is the chart clearing showing the domination of the Institutions while investing in Mutual Funds:

Assets managed by the Indian mutual fund industry

Institutions vs Individuals

  • Investments by Individuals account for a little over 45% of the total assets while the remaining 55% is constituted by Institutions
  • Investments from Individuals stands at Rs. 6.57 lakh crore for the month of May-16 compared to Rs. 5.63 lakh crore for the same month of previous year while investments from Institutions stands at Rs. 7.88 lakh crore for the month of May-16 compared to Rs. 6.62 lakh crore for the same month of previous year. That is Individuals are at least a year behind in terms of monetary investments in MF compared to Institutions.
  • Investment amount has increased every month except for Mar-16 in case of Institutions which witnessed a Rs. 0.1 lakh crore drop while for Individuals it was in the month of Feb-16 – a drop of Rs. 0.15 lakh crore.

Investor Type-wise Composition of Mutual Fund Asset

Scheme Wise Composition

While investments in liquid funds (Rs. 3.51 lakh crore assets) has only increased by 25% in May-16 compared to Oct-14 levels, ETF has commanded the highest increase at 62% though it has only Rs. 0.26 lakh crore worth assets followed by Equities at 48% (Rs. 4.45 lakh crore assets) and Debt Funds at 32% (Rs. 6.23 lakh crore assets). The EPFO investing through ETFs – started last year – would have made this change. 

While Individual investors prefer equity over debt for investments, Institutions have preferred Debt over liquid funds.

Debt + Liquid funds account for a little below 90% of the assets for Institutions while for Individual Equity + Debt funds account for a little over 95% of the assets.

Here is how the investment decisions were spread across the different schemes between Individuals and Institutions: Investors Across Categories

Here is the trend over the past 8 months:

Scheme wise Composition of Assets

B15/ T15 Mix

The top fifteen cities in India are marked as T15 for mutual fund investors – so if you’re in these cities, your investment is a T15 investment. B15 is everything else. 

  • Over 83% of the assets (Rs. 12.1 lakh crore) have come from Top 15 locations while the remaining 17% (Rs. 2.31 lakh crore) has come from non-T15 locations.
  • T15 investors clearly love investing in Non-Equity funds when compared to Equity Funds. Their average investment in Equity Funds has been 72% of the assets (Rs. 8 lakh crore) while the non-T15 investors prefer a perfect weightage between equities and non-equities. This can be explained by the fact that most institutions and corporates are in T-15 locations (big cities). 
  • The B15 location coverage is actually falling – for both individuals and institutions. Individual ownership in B15 has fallen about 0.5% in terms of marketshare since last year.

Assets from B15

Distributors vs Direct

  • 39% of the assets of the mutual fund industry came directly. This has been growing. 
  • 64% of liquid/ money market scheme assets where institutional investors dominate were direct, whereas 43% of debt oriented scheme assets were direct.
  • Proportion of direct investment in equity to the total assets held by individual investors was about 5.6% in May 2016.

Distributor vs Direct

Individual-Investor Assets Composition

  • 66% of the assets of Individual Investors are from T15 cities brought in by distributors.
  • Direct investments amount to 14% of individual assets i.e. 3% from B15 and 11% from T15.

Individual Investors scheme level composition

Source: AMFI -> Research & Information -> Other Data

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Disclaimer

Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you do, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion.

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1 COMMENT

  1. Thanxalot,

    I[36yr] have PPF [3lac]for me,
    I m opened sukanya samridhi for 2 yr daughter
    n thinking to start an RD 10 k monthly at DHFL{ ~9% interest} for my one yr son.

    My wife[36yr] has a PPF[4lac]
    NPS of 5k monthly

    We have 3 lac FD
    own house,one flat for real estate,a family health insurance,life insurance.

    Two questions
    1.Is saving in RD at DHFL ok,good n secure return ?
    2.All extra income I want to save in wife’s NPS tier II
    so can NPS tier II give me
    Good returns approaching equal to MF
    It has better security,liquidity,tax saving.
    I am not very smart in following market so it gives me a peace of mind
    too

Comments are closed.