SBI Mutual Fund to Axis MF, top 15 fund houses lead equity asset growth

The top 15 fund houses have cornered more than half of the incremental inflows coming into open-ended equity schemes of mutual funds in the past year. 

Among them, SBI Mutual Fund (MF), Axis MF and Aditya Birla Sun Life MF saw the most addition in equity assets for the one-year period ended November 2018, the data from Value Research shows. They have added assets to the tune of Rs 266 billion, Rs 95 billion and Rs 83 billion, respectively. 

Among the mid-size fund houses, Mirae Asset MF and Motilal Oswal MF saw the most addition in assets of Rs 64 billion and Rs 32 billion, respectively. 

Overall, equity assets grew 15 per cent to Rs 7.4 trillion during the past year, with 15 fund houses seeing an addition of more than Rs 10 billion each in assets. Total assets under management of the MF industry, on the other hand, grew at a much slower pace of 5.4 per cent to Rs 24 trillion in the past year. 

But, 10 fund houses, including three that are among the top 10 players, saw de-growth in their assets.

Fund houses take in asset management fees anywhere between 100 and 150 bps for equity schemes, compared to 5-100 bps for debt schemes, show estimates. Equity assets are also stickier than debt assets.

“With assets growing at a brisk pace over the past 2-3 years, the economies of scale are playing out for the larger AMCs,” said Dhaval Kapadia, director (portfolio specialist), Morningstar India.

According to experts, MFs have benefited from a shift to financial assets from physical assets like real estate and gold. Investments through systematic investment plans (SIPs) have averaged Rs 60-70 billion in the past year or so.

“An equity investment culture is rising and taking a more formal form. Most new-age investors are professionals earning a livelihood in other industries; stock markets are simply a vehicle for their savings. Given the lack of expertise, resources and time, these investors are investing through insurance schemes and MFs,” said a note by foreign brokerage Jefferies.