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Mutual Fund Screener

For the quarter ended Mar-18


Mutual Fund Screener – What’s Inside

01 02 03 04
Industry Investor Inflow Outflow Sector
Size Trends Analysis Update

05 06 07
Category Industry Regulatory
Performance Insights Update
Section I INDUSTRY SIZE
Industry QAAUM up 3% - crosses Rs. 23 lakh crore
Mutual Fund Industry (QAAUM) Growth trend of AMCs for the quarter ended Mar-18
Mar-18, AMCs Range
Dec-17,
24,00,000 23,05,212 Top 5 0.5% to 6%
22,36,717
Mar-17, Next 10 -5% to 10%
18,29,583
Rest -15% to 35%
QAAUM (In Rs. Crore)

18,00,000
Source: AMFI, ICRA Online Research
Note: QoQ growth of QAAUM as of Mar-18
12,00,000
✓ Industry Quarterly Average Assets Under
Management (QAAUM) grew for the 18th
6,00,000
consecutive quarter in Q4FY18
- The 3.1% quarterly growth in industry
0 assets was driven by benign capital
Mar-17 Dec-17 Mar-18
markets for most part of the fiscal; investor
Source: AMFI, ICRA Online Research
Note: QAAUM – Quarterly Average Assets Under Management awareness campaigns like “Mutual fund
sahi hai”; and strong retail participation,
especially from B-15 investors
Rs. 68,495 crore added in Q4FY18

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Top 10 AMCs account for ~81% of QAAUM
Top 10 AMCs

3,50,000 QAAUM ≥ Rs. 3 10%


lakh crore QAAUM ≥ Rs. 2 lakh crore
and < Rs. 3 lakh crore
2,80,000 8%
QAAUM ≥ Rs. 1 lakh crore

QoQ Growth (In %)


and < Rs. 2 lakh crore
AUM (In Rs. Crore)

2,10,000 6%

1,40,000 4%

70,000 2%

0 0%
ICICI HDFC Mutual Aditya Birla Reliance SBI Mutual UTI Mutual Kotak Franklin DSP Axis Mutual
Prudential Fund Sun Life Mutual Fund Fund Fund Mahindra Templeton BlackRock Fund
Mutual Fund Mutual Fund Mutual Fund Mutual Fund Mutual Fund

Mar-18 Dec-17 % Change QoQ

Source: AMFI, ICRA Online Research

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Smaller AMCs grow at a faster pace

Top 10 Fastest Growing AMCs


Mar-18 Mar-17 % Change YoY
2,50,000 125%
AUM (In Rs. Crore)

2,00,000 100%

YoY Growth (In %)


Among the larger AMCs (QAAUM >
1,50,000 75% Rs. 35,000 crore), SBI and L&T Mutual
1,00,000 50% Fund have shown tremendous
50,000 25%
growth in assets
0 0%
L&T Mutual Fund
SBI Mutual Fund

Edelweiss Mutual Fund

IDBI Mutual Fund

Mahindra Mutual Fund

IIFL Mutual Fund


Motilal Oswal Mutual

BOI AXA Mutual Fund

PPFAS Mutual Fund


Mirae Asset Mutual

QAAUM of eight fastest growing


AMCs below Rs. 20,000 crore
Fund
Fund

Source: AMFI, ICRA Online Research

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Private sector JVs (predominantly Indian) manage ~55% of Q4FY18 QAAUM
As a % of QAAUM (In Rs. Crore) Growth
Category Q4FY18
QAAUM Q4FY18 Q4FY17 Q4FY16 Year 1 Year 2

Joint Ventures - Predominantly Indian 10.3% 236,474 170,901 118,822 38.4% 43.8%

Bank Sponsored Joint Ventures - Predominantly Foreign 0.5% 10,760 7,719 6,835 39.4% 12.9%

Others 7.4% 169,958 151,046 114,501 12.5% 31.9%

Institutions Indian 0.9% 20,768 21,888 13,514 -5.1% 62.0%

Indian 17.7% 408,322 309,118 228,925 32.1% 35.0%

Joint Ventures - Predominantly Indian 54.8% 1,262,372 1,007,955 723,393 25.2% 39.3%

Private Sector Foreign 6.6% 153,271 118,491 94,756 29.4% 25.0%

Joint Ventures - Predominantly Foreign 0.9% 19,692 15,287 13,210 28.8% 15.7%

Joint Ventures - Others 1.0% 23,595 26,117 25,987 -9.7% 0.5%

Source: AMFI, ICRA Online Research


Note: Year 1 – Q4FY18 vs Q4FY17, Year 2 – Q4FY17 vs Q4FY16

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Section II INVESTOR TRENDS

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MF industry adds 48.6 lakh folios in Q4FY18
Category-wise Folio Count (In Lakhs) Folio Growth in Last 12 Months

713.5

1 Month Change (In Lakhs)


FoF investing overseas

699.0
750 20

683.3
Other ETFs

Folio Count (In Lakhs)

664.9
649.2
Gold ETF 700
15

631.7
620.5
608.5
Balanced 650

594.2
582.3
571.9
10

561.4
Equity
600
ELSS
5
550
Income
Gilt 500 0

Jan-18
Feb-18
Mar-18
Sep-17
Oct-17

Dec-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17

Nov-17
Liquid/ Money Market
Folio Count (In Lakhs)
0 125 250 375 500
Mar-18 Feb-18 Mar-17 Folio 1 Month Change

Source: AMFI, ICRA Online Research Source: SEBI, ICRA Online Research

✓ As per data from SEBI, total folio count at the end of Mar-18 stood at 7.1 crore, 7.3% higher than the
previous quarter
✓ The mutual fund industry added close to 48.6 lakh new folios in Q4FY18 out of which 42.4 lakh were
in the Equity category (including ELSS)

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B-15 locations generate ~19% of industry assets in Mar-18

Growth in Assets in T-15/B-15 Locations Equity/Non-equity Asset Mix in T-15/B-15


Mar-18, Locations
18,44,190 Mar-17,
AUM (In Rs. Crore)

20,00,000
15,48,708 100%
60% 62% 69%
15,00,000 75% 54% 46%
40% 38% 31%
50%
10,00,000 Mar-17, 25%
Mar-18,
3,09,098 0%
4,26,436
5,00,000 T15 B15 T15 B15

0 Mar-18 Mar-17
Mar-18 Mar-17 Equity Non-equity
T15 B15

AUM Garnered by Different Channels ✓ The country’s smaller towns or B-15 (beyond
Mar-18 Mar-17 top 15 cities) locations accounted for 18.8%
of the total industry AUM at the end of
T-15 B-15 T-15 B-15
Mar-18
Direct Plan 46% 20% 46% 22%
✓ In the last 12 months, B-15 towns have
Associate Distributor 6% 17% 6% 13% witnessed AUM growth of 38% or Rs. 1.17 lakh
Non-Associate
48% 64% 48% 64%
crore to reach Rs. 4.26 lakh crore
Distributor
Source: AMFI, ICRA Online Research
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INFLOW OUTFLOW
Section III
ANALYSIS
Investors pour in close to Rs. 38,000 crore in Equity MFs in Q4FY18
Category-wise Net Inflow/Outflow Industry-wide Net Inflow/Outflow
75,000 67,499
Q4FY18 Q3FY18 Q4FY17

In Rs. Crore
Fund Of Funds Investing Overseas 50,000
29,207
Other ETFs
25,000
Gold ETF 13,225

ELSS - Equity
0
Gilt Q4FY18 Q3FY18 Q4FY17
Source: AMFI, ICRA Online Research
Liquid/Money Market

Balanced In Q4FY18, net inflow in the Equity


Equity
category (including ELSS) was Rs. 38,315
crore compared with Rs. 19,558 crore in
Infrastructure Debt Fund Q4FY17, mainly driven by Systematic
Income Investment Plans (SIPs). In FY18,
-70,000 -35,000 0 35,000 70,000 cumulative SIP contribution was Rs. 67,190
In Rs. Crore crore, up from Rs. 43,921 crore in FY17
Source: AMFI, ICRA Online Research

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Robust retail participation leads to high infusion in Equity funds
Equity Net Inflow/Outflow
21,000

15,000
In Rs. Crore

9,000

3,000

-3,000
Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18

Source: AMFI, ICRA Online Research;


Note: Equity includes ELSS funds

✓ Equity funds (including ELSS) saw net inflow of Rs. 38,315 crore in Q4FY18 vis-à-vis Rs. 52,397 crore in
Q3FY18. Cumulative inflow into these funds surged 143% to Rs. 171,069 crore in FY18 from Rs. 70,367
crore in FY17
✓ As per AMFI data, SIP contribution grew 62% in Q4FY18 to Rs. 20,188 crore from Rs. 12,480 crore in
Q4FY17
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Section IV SECTOR UPDATE
Top 5 sectors constitute about 50% of the total Equity AUM

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


32,000
Equity AUM (In Rs. Crore)

24,000

16,000

8,000

0
Banks Finance Consumer Non Durables Software Auto
HDFC Mutual Fund SBI Mutual Fund ICICI Prudential Mutual Fund Reliance Mutual Fund Aditya Birla Sun Life Mutual Fund

Source: AMFI, ICRA Online Research

✓ AMCs continue to bet on Banks and Finance sectors with ~ 30% of the total Equity AUM exposure
✓ Over the year, holdings in Power sector increased ~98%, Finance sector ~78% and Construction
Projects sector ~59%

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Banks and Finance sectors remain fund managers’ favourites*
Sector-wise Inflow
1,80,000 130%
Mar-18 Mar-17 % change 125%

98% 104%
1,35,000

% Change YoY
77%
78%
In Rs. Crore

90,000
59%
44% 52%
41%
31% 36% 26%
45,000
24% 26%

0 0%

Petroleum
Construction

Auto
Banks

Finance

Consumer

Software

Power

Non - Ferrous
Ancillaries
Durables

Products
Auto
Project
Non

Metals
Source: AMFI, ICRA Online Research
Note: Only top-10 sectors considered, *Increase in exposure is in absolute terms

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Section V CATEGORY PERFORMANCE
Equity-oriented MF performance dwindles as markets take a hit
Performance* of Equity-Oriented Mutual Fund Categories

19.0

18.6
18.1
20

14.8

13.2
13.2
12.4
Returns (In %)

12.1

12.0
15
11.7

11.4
11.0

10.5
10.1

9.8
9.0

7.9
7.8
10

7.0
5

0
1 Year 3 Year 5 Year 10 Year
Diversified Funds Global Funds Sector Funds ELSS Index Funds

Source: ICRA Online Research;


Note: *Compound Annualized returns
Data as of Mar-18

Key drivers:
✓ Market corrections led to 3.2% and 4% QoQ decline in S&P BSE Sensex and Nifty 50 benchmark
indices, respectively
✓ Factors like loan frauds in the domestic banking sector, fear of a global trade war, geopolitical
tensions worried investors
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Debt-oriented categories post muted returns
Performance* of Short-term Debt-oriented Performance* of Long-term Debt-oriented
Categories Categories

7.6
7.5
7.3

8.2

8.1
7.1

8.0
8
6.9

7.8
6.7
9

6.6

6.6
6.5

7.4
7.0
6.1

6.1

Returns (In %)
Returns (In %)

5.4
4.4
6
4

2.9
3
2

0 0
3 Months 6 Months 1 Year 3 Years 1 Year 3 Years 5 Years 10 Years
Liquid Funds Ultra Short-Term Funds Short-Term Funds Income Funds Gilt Funds

Source: ICRA Online Research


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

Key drivers:
✓ Bond yields surged in Q4FY18 over concerns of fiscal deficit. They moderated towards the end of
the quarter after reports revealed government will lower borrowings in H1FY19
✓ Income category witnessed net outflow of Rs. 33,389 crore in Q4FY18 on the back of higher yields

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Section VI INDUSTRY INSIGHTS
MF inflows continue to drive the equity markets; FPI/FII dip 51% (YoY)
FPI/FII & Mutual Fund Investment Trends in Equity Markets
1,50,000 1,40,033 1,36,089

1,10,540

1,00,000
79,723
65,041
In Rs. Crore

52,977 54,912
50,000 40,281
26,021

-14,171
-22,678 -20,925
-50,000
FY13 FY14 FY15 FY16 FY17 FY18

FPI/FII MF

Source: ICRA Online Research

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Large-Caps continue to command the largest share of assets

Investment Across Market Caps*


100%

80%

60%
In %

40%

20%

0%
Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18
Large-Cap Mid-Cap Small-Cap Debt & Other

Source: ICRA Online Research


Note: *On the basis of ICRA Online classification, only Equity Diversified funds were considered for analysis

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In %

0%
25%
50%
75%
72.05%
Bond/
70.38%
Debenture
71.58%

3.12%

Source: ICRA Online Research


Cash &
Equivalents 5.62%
3.15%

7.47%
CD 4.38%
3.12%

7.69%
CP 6.65%
5.41%
Mar-18
4.03%
Gilt 6.23%
Dec-17

6.69%
Instrument allocation pattern in Debt segment

ICRA Online Limited


Mar-17

1.37%
Others 1.28%

2.24%

0.01%

REITs & InvITs 0.02%

0.00%

4.22%

SDL 4.58%
7.63%

0.03%

T-Bill 0.86%
23

0.18%
Average maturity remains steady in Q4FY18
Average Maturity Trends in Income, Gilt Long-Term & Gilt Short-Term Funds
12
Average Maturity (In Years)

0
Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18

Income Fund Gilt Long-Term Gilt Short-Term

Source: ICRA Online Research


Note: Categorisation of Income and Gilt funds as per ICRA Online classification

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Section VII REGULATORY UPDATE
Regulator remains vigilant (1 of 2)
SEBI Effective Impact on retail
Date Brief Earlier practice
mandate from investors
02-Feb-18 Disallows Immediate AMCs cannot charge additional AMCs charge up to 0.2% Has lowered the
charging of effect expenses of up to 0.2% of daily net assets of daily net assets for cost of investments
additional (02-Feb-18) for schemes where exit load is not additional expenses,
expenses levied/not applicable (includes close- incurred towards different
ended schemes) heads

02-Feb-18 Allows 01-Apr-18 1. Definition of top cities and beyond top AMCs charge additional 1. Has lowered the
additional cities has been revised. The T-15 and B-15 TER up to 30 basis points cost of investments
Total Expense would be replaced by T-30 and B-30 on daily net assets of the
Ratio (TER) to scheme if the new inflow 2. Penetration of
be charged 2. Additional TER of up to 30 basis points from B-15 cities are at mutual fund
only for B-30 would be allowed for inflow from beyond least (a) 30% of gross new beyond top 30 cities
locations top 30 cities (B-30) instead of beyond top inflows in the scheme or
15 cities (B-15) (b) 15% of the average
AUM (year to date) of the
scheme, whichever is
higher

Source: SEBI

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Regulator remains vigilant (2 of 2)
SEBI Effective Impact on retail
Date Brief Earlier practice
mandate from investors
05-Feb-18 Changes 01-Mar-18 1. AMCs need to disclose Total Expense AMCs disclosed monthly Has provided
AMCs’ Ratio (TER) of all schemes under a TER in factsheets greater
disclosure separate head on their website on daily transparency and
norms for TER basis; downloadable in spreadsheet uniformity

2. Any change in the base TER of a


scheme will be communicated to
investors through email or SMS at least
three working days prior to effecting such
change

12-Apr-18 Frames 01-May-18 SEBI provided a framework for No specific norms for Has provided
disclosure performance disclosure of schemes post disclosing the greater
norms for consolidation/merger. While different performance of a transparency and
consolidated formats for different scenarios are surviving scheme post uniformity
/ merged prescribed, the common theme is AMCs merger
schemes will have to disclose the weighted
average performance of both the new
and old schemes

Source: SEBI

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Contact Information

Saugat Acharya Atul Sharma Eshna Basu


+91 98209 74940 +91 96191 12544 +91 96747 11671
saugat.acharya@icraonline.com atul.sharma@icraonline.com eshna.basu@icraonline.com

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