investors, mutual funds & returns trend analysis report

Investors, Mutual

Funds & Returns –

Trend Analysis

Report

November 2018

Industry Size

Investor Trends

Inflow Outflow Analysis

Sector Update

Category Performance

Industry Insights

Regulatory Update

Mutual Fund Screener – What’s Inside

Industry Size

✓ Industry Quarterly Average Assets UnderManagement (QAAUM) grew for the 20th

consecutive quarter in Q2FY19

✓ Tailwinds for the industry include:

✓ Strong retail participation especially fromB30 cities. Investor awareness campaignssuch as “Mutual Funds Sahi Hai”

✓ Significant increase in SIP accounts

Growth Trend of AMCs for the Quarter ended Sep-18

AMCs Range

Top 5 0% to 9%

Next 10 0% to 11%

Rest -6% to 26%

Source: AMFI, ICRA Online Research

Note: QoQ growth of QAAUM as of Sep-18

4

Rs. 90,754 crore added in Q2FY19, up 16% YoY

Sep-17,

2,094,852

Jun-18,

2,340,377

Sep-18,

2,431,131

0

1,000,000

2,000,000

3,000,000

Sep-17 Jun-18 Sep-18

QA

AU

M (

In R

s. C

rore

)

Mutual Fund Industry (QAAUM)

Source: AMFI, ICRA Online Research;

Note: QAAUM – Quarterly Average Assets Under Management

Industry QAAUM up 4% QoQto Rs. 24.31 lakh crore in Q2FY19

5


-2%

0%

2%

4%

6%

8%

10%

12%

0

70,000

140,000

210,000

280,000

350,000

ICICI

Prudential

Mutual Fund

HDFC Mutual

Fund

Aditya Birla

Sun Life

Mutual Fund

SBI Mutual

Fund

Reliance

Mutual Fund

UTI Mutual

Fund

Kotak

Mahindra

Mutual Fund

Franklin

Templeton

Mutual Fund

DSP Mutual

Fund

Axis Mutual

Fund

Q-o

-Q G

row

th (

In %

)

QA

AU

M (

In R

s. C

rore

)

Top 10 AMCs

Sep-18 Jun-18 % Change QoQ

QAAUM ≥ Rs. 3 lakh crore QAAUM ≥ Rs. 2 lakh

crore and < Rs. 3 lakh crore

QAAUM ≥ Rs. 1 lakh crore and <

Rs. 2 lakh crore

QAAUM of top 10 AMCs between Rs. 0.90 lakh crore and Rs. 3.10 lakh crore

6

0%

25%

50%

75%

100%

125%

0

70,000

140,000

210,000

280,000

IIFL

Mu

tua

l Fu

nd

Ma

hin

dra

Mu

tua

l Fu

nd

Mira

e A

sse

t

Mu

tua

l Fu

nd

Ed

elw

eis

s

Mu

tua

l Fu

nd

PP

FA

S M

utu

al

Fu

nd

Mo

tila

l Osw

al

Mu

tua

l Fu

nd

IL&

FS M

utu

al

Fu

nd

(ID

F)

L&T

Mu

tua

l

Fu

nd

BO

I A

XA

Mu

tua

l

Fu

nd

SB

I M

utu

al F

un

d

Yo

Y G

row

th (

In %

)

QA

AU

M (

In R

s. C

rore

)

Top 10 Fastest Growing AMCs

Sep-18 Sep-17 % Change YoY


Smaller AMCs grow at a faster pace, ranging from ~35% to 100%

✓ QAAUM of eight fastestgrowing AMCs below Rs.25,000 crore

✓ Among the larger AMCs(QAAUM > Rs. 35,000crore), SBI Mutual Fundand L&T Mutual Fund hasshown tremendous growthin assets

7


Note: QoQ – Q2FY19 vs Q1FY19; YoY – Q2FY19 vs Q2FY18

CategoryAs a % of Q2FY19 QAAUM

QAAUM (In Rs. Crore) Growth

Q2FY19 Q1FY19 Q2FY18 QoQ YoY

Bank

Sponsored

Joint Ventures - Predominantly Indian 11.5% 278,656 256,573 208,011 8.6% 34.0%

Joint Ventures - Predominantly

Foreign0.6% 13,564 12,240 11,138 10.8% 21.8%

Others 7.2% 175,907 163,723 160,200 7.4% 9.8%

Institutions Indian 0.9% 21,064 21,057 23,504 0.0% -10.4%

Private

Sector

Indian 21.8% 529,156 503,111 438,177 5.2% 20.8%

Joint Ventures - Predominantly Indian 49.5% 1,203,315 1,185,923 1,074,010 1.5% 12.0%

Foreign 6.9% 167,048 156,572 137,637 6.7% 21.4%

Joint Ventures - Predominantly

Foreign0.8% 19,721 18,040 16,004 9.3% 23.2%

Joint Ventures - Others 0.9% 22,700 23,137 25,191 -1.9% -9.9%

Private sector JVs (predominantly Indian) manage ~50% of Q2FY19 QAAUM

Investor Trends

✓ As per SEBI data, total folio count at the end of Sep-18 was 7.8 crore, up 4.4% from the previousquarter

✓ Out of the 32.6 lakh new folios added in Q2FY19, 29.5 lakh were in the Equity category (includingELSS)

9

0 125 250 375 500

Liquid/ Money Market

Gilt

Income

ELSS

Equity

Balanced

Gold ETF

Other ETFs

FoF investing overseas

Folio Count (In Lakhs)

Category-wise Folio Count (In Lakhs)

Sep-18 Jun-18 Sep-17


63

1.7

64

9.2

66

4.9

68

3.3

69

9.0

71

3.5

72

1.9

73

4.6

74

6.3

75

4.9

76

5.7

77

8.9

0

5

10

15

20

500

600

700

800

Oc

t-1

7

No

v-1

7

De

c-1

7

Ja

n-1

8

Fe

b-1

8

Ma

r-18

Ap

r-1

8

Ma

y-1

8

Ju

n-1

8

Ju

l-18

Au

g-1

8

Se

p-1

8 1-M

on

th C

ha

ng

e (

In L

ak

hs)

Fo

lio

Co

un

t (I

n L

ak

hs)

Folio Growth in Last 12 Months

Folio 1-Month Change

Source: SEBI, ICRA Online Research

Q2FY19 sees 32.6 lakh new folios; Equity remains the most popular category

✓ The country’s smaller towns or B30 (beyondtop 30 cities) locations accounted for 14.7%of the total industry AUM at the end of

Sep-18

✓ SEBI has expanded the scope of T15/B15locations to T30/B30 from the beginning ofFY19

10


AUM Garnered by Different Channels

Sep-18 Aug-18

T30 B30 T30 B30

Associate Distributor 6% 19% 6% 19%

Direct Plan 44% 17% 45% 18%

Non-Associate

Distributor50% 64% 49% 63%

Sep-18,

2,074,347

Aug-18,

2,112,410

Sep-18,

357,003

Aug-18,

357,667

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Sep-18 Aug-18

AU

M (

In R

s. C

rore

)

Growth in Assets in T30/B30 Locations

T30 B30

42%

66%

42%

65%58%

34%

58%

35%

0%

25%

50%

75%

100%

T30 B30 T30 B30

Sep-18 Aug-18

Equity/Non-equity Asset Mix in T30/B30 Locations

Equity Non-equity

B30 locations generate ~14% of industry assets in Sep-18

Inflow Outflow Analysis

✓ In Q2FY19, net inflows in the Equitycategory (including ELSS) was Rs.28,999 crore compared with Rs. 32,181crore in Q4FY18

✓ Cumulative SIP contribution has beenRs. 22,939 crore for Q2FY19 vis-à-vis Rs.21,548 crore in Q1FY19

12

-75,000 -40,000 -5,000 30,000 65,000 100,000 135,000

Income

Infrastructure Debt Fund

Equity

Arbitrage Funds

Balanced

Liquid/Money Market

Gilt

Elss - Equity

Gold Etf

Other Etfs

FoFs Investing Overseas

In Rs. Crore

Category-wise Net Inflow/Outflow

Q2FY19 Q1FY19 Q2FY18


-88,138

133,903

108,601

-100,000

-50,000

0

50,000

100,000

150,000

Q2FY19 Q1FY19 Q2FY18

In R

s. C

rore

Industry-wide Net Inflow/Outflow


Investors pour about Rs. 29,000 crore in Equity mutual funds in Q2FY19

✓ Equity funds (including ELSS) witnessed lower net inflows in Q2FY19 vis-a-vis Q1FY19, as equitymarkets remained volatile

13

-5,000

1,000

7,000

13,000

19,000

25,000

Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18

In R

s. C

rore

Equity Net Inflow/Outflow

Source: AMFI, ICRA Online Research;

Note: Equity includes ELSS funds

Robust SIP inflows seen from retail investors

Sector Update

15

✓ AMCs continue to bet on Banks and Finance sectors with ~ 12% of the total equity AUM

✓ Riding on a weak rupee, Pharmaceuticals and Software sectors remained in the top five

30,3

78

15,0

54

7,1

93

5,4

51

6,4

22

28,5

39

13,9

17

12,6

62

12,6

44

7,6

22

14,5

44

9,1

56

6,6

59

8,7

93

8,2

59

18,8

69

3,6

30

6,7

19

3,7

74

6,0

61

13,4

81

6,9

69

7,5

20

7,4

43

5,3

03

0

8,000

16,000

24,000

32,000

Banks Software Finance Consumer Non Durables Pharmaceuticals

Eq

uity

AU

M (

In R

s. C

rore

)

Equity Exposure of Top Five AMCs in Top 5 Sectors (Sep-18)

HDFC Mutual Fund SBI Mutual Fund ICICI Prudential Mutual Fund Reliance Mutual Fund Aditya Birla Sun Life Mutual Fund


Top five sectors constitute about 52% of the total equity AUM

16

-15%

20%

55%

90%

0

37,000

74,000

111,000

148,000

185,000B

an

ks

So

ftw

are

Fin

an

ce

Co

nsu

me

r

No

n

Du

rab

les

Ph

arm

ac

eu

ti

ca

ls

Pe

tro

leu

m

Pro

du

cts

Au

to

Co

nst

ruc

tio

n

Pro

jec

t

Po

we

r

Au

to

An

cill

arie

s

% C

ha

ng

e Y

oY

In R

s. C

rore

Sector-wise Inflow in Sep-18 Vis-a-vis Jun-18 and Sep-17Sep-18 Jun-18 Sep-17 % change - QoQ % change - YoY


Note: Only top-10 sectors considered

Software sector sees highest growth in inflow in percentage terms

Category Performance

✓ Performance of equity-oriented mutual funds remained under pressure as Indian equity markets slumped

to more than two-month low in Sep-18

✓ Slide in rupee, banks’ management issues, liquidity concerns, surge in crude oil prices and global trade

war concerns pressured markets

18

4.7

9.4

15

.5

12.4

-3.4

8.9

23.4

17.0

0.9

10.7

19.2

13.8

-6.6

10.8

25.8

15.7

2.6

10.1

18.4

14.6

2.7

11.0

18.3

14.3

-0.7

11.2

20.6

15.8

2.4

10.3

18.3

13.6

-10

-5

0

5

10

15

20

25

30

1 Year 3 Year 5 Year 10 Year

Re

turn

s (I

n %

)

Performance* of Equity-Oriented Mutual Fund Categories

Large Cap Fund Mid Cap Fund Large & Mid Cap Fund Small cap Fund Multi Cap Fund Focused Fund Value Fund ELSS

Source: ICRA Online Research;

Note: *Compound Annualized returns; Data as of Sep-18

Performance of Equity mutual funds stays subdued over the year

19

2.5

8.9

15

.4

12

.3

1.7

6.4

9.4

8.8

4.7

8.4

14.2

12.3

3.3

6.9

8.1

7.7

5.6 6

.1 7.0 7.1

4.2

7.5

10.0 1

1.1

0

4

8

12

16

1 Year 3 Year 5 Year 10 Year

Re

turn

s (I

n %

)

Performance* of Hybrid Mutual Fund Categories

Aggressive Hybrid Fund Conservative Hybrid Fund

Dynamic Asset Allocation or Balanced Advantage Equity Savings

Arbitrage Fund Multi Asset Allocation

Source: ICRA Online Research;

Note: *Compound Annualized returns; Data as of Sep-18

Hybrid categories post muted performance in shorter tenures

20

Key drivers:

✓ Gilt funds underperformed over the year as rising global crude oil prices, a plunging rupee and increase in

domestic inflationary pressures pushed up bond yields

5.1

6.1

4.9

3.7 4

.3 4.9 5

.7

4.1

1.0

5.8

3.7

3.0

2.7

1.9

6.4

5.1

-0.4

6.1

4.3 4.4

3.4

1.4

6.6

5.85.9

7.3

6.8 7

.5

6.5

6.2 7

.0 7.0

-2

0

2

4

6

8

Gilt Fund Low Duration

Fund

Short Duration

Fund

Credit Risk Fund Corporate

Bond Fund

Dynamic Bond Liquid Fund Ultra Short

Duration Fund

Re

turn

s (I

n %

)

Performance* of Debt Funds

3 Months 6 Months 1 Year 3 YearsSource: ICRA Online Research

Note: *Compound annualised returns for periods ≥1 year; Simple annualised returns for <1 year; Data as of Sep-18

Long Term Medium Term Short Term

Short-term funds perform better than their long-term peers

Industry Insights

22

79,723

110,540

-14,171

52,977

26,021

-26,148-20,925

40,281

65,04154,912

140,042

50,085

-50,000

0

50,000

100,000

150,000

FY14 FY15 FY16 FY17 FY18 FY19 TD

In R

s. C

rore

FPI/FII & Mutual Fund Investment Trends in Equity Markets

FPI/FII MF

Source: ICRA Online Research

Outflows in Sep-2018 surpass inflows seen in the first two months of Q2FY19

23

0%

25%

50%

Bond/

Debenture

CP CD Gilt SDL T Bill Others REITs & InvITs Cash &

Equivalents

In %

Sep-18 Jun-18 Mar-18


Instrument allocation pattern in debt segment

24

0

5

10

15

Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18

Ave

rag

e M

atu

rity

(In

Ye

ars

)

Average Maturity Trends in Corporate Bond Fund, Dynamic Bond, Gilt Fund, Gilt Fund with

10-Year Constant Duration

Corporate Bond Fund Dynamic Bond Gilt Fund Gilt Fund with 10 Year Constant Duration


Average maturity trend in last one year

Regulatory Update

26

SEBI lowers the fees that mutual

funds charge ▪ SEBI cut expense ratio for open-ended equity schemes based

on AUM size. Total expense ratio for schemes AUM of up to Rs.

500 crore will be 2.25% every year. In addition, SEBI has barred

upfront commissions to distributors

All scheme-related expenses

shall be paid from the scheme

only▪ SEBI mandated that all scheme-related expenses, including

commissions, shall be paid only from the scheme and not from

the books of the AMCs. The regulator has done away with

upfront commission of 1% that was allowed earlier. Going

forward, fund houses will have to pay commission through a full

trail fee model in all schemes

Source: Media Reports

Regulator remains vigilant (1 of 2)

27

Fund houses can charge

additional 30 bps on expense for

B30 cities only on retail AUM▪ Additional expense allowed for penetration in B-30 cities shall

be based only on inflows from retail investors. Industry can

continue to charge additional TER on retail and HNI assets until

SEBI releases a definition on retail investors. Fund houses can

incentivize their distributors with additional B30 commission only

through trail model as against upfront mode

AMFI discontinues online

registration and renewal of

ARN▪ AMFI discontinued mutual fund distributors’ online registration

and renewal of AMFI Registration Number (ARN) with Aadhaar

number following the Supreme Court’s verdict on Aadhaar.

The Unique Identification Authority of India had asked AMFI,

R&T agents and KYC registration agencies to give it in writing

that they have stopped using Aadhaar-based authentication

Source: Media Reports

Regulator remains vigilant (2 of 2)

MUMBAI

15, Ground Floor, Dosti shoppe

Link Dosti Acres, Antop Hill,

Wadala (East)

Mumbai - 400 037 Maharashtra,

Ph : 022 -2414 8864.

Contact Us

GURGAON

1154, 11th Floor Tower B, Spaze

Techpark, Sohna Road

Gurgaon - 122001

Haryana, Ph : 0124-4246036/8

Fax : 0124-4246037.

KOLKATA

Malancha, 4A, Elgin Road,

Kolkata - 700020 West Bengal,

Ph : 033 - 4003 4585,

Ph : 033 - 4006 8556

Fax : 033- 2280 8557.

COIMBATORE

207, 3rd Floor, Tulsi Complex,

1334 Thadagam Road, RS Puram,

Coimbatore - 641 002,

Tamil Nadu,

Ph : +91 422 4367 309.

SILIGURI

Himadri Bhawan Opp.

Gurudwara, Sevoke Road

Siliguri - 734401

West Bengal,

Ph : 0353 -2430 273.

Contact us

[email protected]

[email protected]

All information contained herein is obtained by ICRA Online Limited (“ICRON”) from sources believed by it to be accurate and reliable.

Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS”

without warranty of any kind. ICRON adopts all necessary measures so that the information it uses is of sufficient quality and from sources

ICRON considers to be reliable including, when appropriate, independent third-party sources. However, ICRON is not an auditor and cannot

in every instance independently verify or validate information received in preparing this document.

All information contained herein must be construed solely as statements of opinion, and ICRA Online Limited or its affiliates or group

companies and its respective and any of its officers, directors, personnel and employees, disclaim liability to any loss, damage of any nature,

including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the

use of this document or its contents in any manner or for any contingency within or beyond the control of, ICRON or any of its directors,

officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the

use of or inability to use any such information. Opinions expressed in the document are not the opinions of our holding company, ICRA Limited

(ICRA), and should not be construed as any indication of credit rating or grading of ICRA for any instruments that have been issued or are to

be issued by any entity. The recipient alone shall be fully responsible and/or are liable for any decision taken on the basis of this document

and/or the information contained herein.

Readers are requested to click here for ICRON disclaimer - http://www.icraonline.com/legal/standard-disclaimer.html

Disclaimer

investors, mutual funds & returns trend analysis report

Documents