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MF Weekly: MFs' asset base from smaller cities up 47% at Rs3.41 lakh cr - IndiaNotes.com
MF Weekly: MFs' asset base from smaller cities up 47% at Rs3.41 lakh cr
SMC | Published: 11 Jul, 2017  | Source : IndiaNotes.com

Highlights:


MFs' asset base from smaller cities up 47% at Rs 3.41 lakh cr


Contribution of the country's smaller towns - beyond top-15 cities (B15) in industry parlance - to mutual funds' asset base surged 47 per cent to Rs 3.41 lakh crore by May-end due to investor-friendly initiatives by Sebi. Mutual funds' AUM from B15 locations grew from Rs 2.32 lakh crore in May 2016 to Rs 3.41 lakh crore at the end of May 2017, according to latest data available with AMFI. Currently, B15 accounts for 18 per cent of the total assets of the industry. Besides, these locations have a better balance of equity and non equity assets. Moreover, a large proportion of direct investments were in non-equity oriented schemes where institutional investors dominate. B15 cities are those which are beyond these top 15 cities — New Delhi (including NCR), Mumbai (including Thane and Navi Mumbai), Kolkata, Chennai, Bengaluru, Ahmedabad, Baroda, Chandigarh, Hyderabad, Jaipur, Kanpur, Lucknow, Panjim, Pune and Surat. About 54 per cent of the assets from B15 locations is in equity schemes, while the same is 31 per cent for T15 assets. About 26 per cent of assets held by individual investors is from B15 locations and 10 per cent of institutional assets come from such places. On the other hand, institutional assets are concentrated in T15 locations, accounting for a little over 90 per cent of the total. Further, about 9 per cent of the retail investors chose to invest directly, while over 17 per cent of HNI assets were invested directly. "About 41.4 per cent of the assets of the mutual fund industry came directly. A large proportion of direct investments were in non-equity oriented schemes where institutional investors dominate," AMFI noted. Together, all 42 mutual fund houses managed assets worth Rs 19.04 lakh crore at the end of May 31, 2017. This was 38 per cent higher from Rs 13.82 lakh crore managed by the industry in May last year.


Mirae Asset Mutual Fund’s AUM crosses Rs 10,000 crore


Mirae Asset Mutual Fund ’s AUM has crossed the important mark of Rs 10,000 crore on 5 July, a growth of around 50 per cent in this calendar year and more than tripling of AUM from around Rs 3,440 crore in March 2016, a press release from the company said. Mirae Asset MF, which has completed a little over nine years in India, has witnessed a surge in the number of new clients, with the investor folios crossing 5 lakh (with close to 250,000 SIP investors). The SIP flows have also grown significantly, from Rs 29 crore in March 2016 to monthly inflows of Rs 115 crore in May 2017. Mirae Asset (India) also provides Advisory Services to Hong Kong office for equity investments and Korea offices for both Equity and Debt Investments. The mix of domestic and International businesses is providing stable growth for Mirae Asset India business. Mirae Asset Global Investments (India) Pvt. Ltd currently manages 5 equity funds, 3 debt funds and 1 fund of fund scheme.


MF distributors, IFAs need to enrol for GST


Mutual fund distributors and IFAs (independent financial advisors) will have to enrol for GST, even if the commission they earn is less than Rs 20 lakh in a financial year. As per the communication from Association of Mutual Funds in India (AMFI), from July 1, fund houses will deduct GST from the commission paid to distributors who do not have a GST registration number and pass this tax to the government. They will not deduct it if a GSTN number is provided to them. For distributors with GST registration, asset management company (AMC) will continue to use the forward charge mechanism, that is AMCs will pay gross commission to them. However, such distributors will have to raise an invoice for the commission in a specified format. This is done by AMFI in consultation with chartered accountancy firm PWC. Distributors provide service to the asset management company which is considered as an inter-state supply. Hence, fund houses have to deduct GST unless they have a registration number. Typically, with most fund houses in Maharashtra, distributors outside Maharashtra will have to register for GST.


MF's AUM rises 7 per cent to Rs 19.52 lakh cr in Apr-Jun quarter


Mutual fund industry's asset base rose 7 per cent to all time high of Rs 19.52 lakh crore at the end of June quarter, driven largely by strong participation from retail investors. In comparison, assets under management (AUM) of the MF industry, comprising 42 players, were at Rs 18.3 lakh crore during the January-March quarter, as per the data of Association of Mutual Funds in India (Amfi). The industry's AUM had crossed Rs 10 lakh crore in May 2014, and is expected to soon reach Rs 20 lakh crore. Of the 42 fund houses, as many as 35 MFs witnessed growth in their asset base, while five saw decline in their AUMs. The Amfi data did not include assets base of Sahara MF and SREI MF. ICICI Prudential MF continued to be the largest with an AUM of Rs 2,60,225 crore (excluding fund of funds) followed by HDFC MF (Rs 2,53,044 crore), Reliance MF (Rs 2,22,964 crore), Birla Sun Life MF (Rs 2,05,715 crore) and SBI MF (Rs 1,68,816 crore). Axis MF has entered in the top 10 league with an AUM of Rs 63,599 crore .

 

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