Mutual Fund Screener

For the quarter ended Mar-17

ICRA Online Ltd

A Group ICRA company
 Mutual Fund Screener – What’s Inside

01 02 03

Industry Inflow Outflow Sector

QAAUM Analysis Update

04 05 06 07

Category Industry SEBI Investor Regulatory

Performance Insights Survey 2015 Update
Section I

INDUSTRY QAAUM
 Industry QAAUM hits another high, Rs. 136,244 cr
added in Q4FY17
Mutual Fund Industry (QAAUM) Growth in QAAUM for the Quarter Ended Mar-17
2,000,000
Mar-17, AMCs Range
1,829,583 Dec-16,
1,693,339 Top 5 6% to 12%
Mar-16, Next 10 4% to 18%
1,500,000
QAAUM (n Rs. Crore)

1,353,443
Rest -20% to 37%
Q-o-Q
Source: AMFI; ICRA Online Research. AMC list based on Mar-17 QAAUM
8%
1,000,000

Y-o-Y
500,000 35.2%
AUM of the mutual fund industry has increased five
times in the last decade1 and is expected to touch the
magical figure of Rs. 20 trillion in CY17
0
Mar-17 Dec-16 Mar-16
Source: AMFI, ICRA Online Research; QAAUM – Quarterly Average
Assets Under Management

 Industry QAAUM grew for the 14th consecutive period in Q4FY17

 The 8.05% Q-o-Q growth in QAAUM was driven by strong participation by retail investors, robust inflow in
equity schemes through SIP, and mark to market gains
1AMFI 4
ICRA Online Limited
 Top 10 AMCs account for ~81% of QAAUM
Top Ten AMCs
250,000 15%

200,000 12%

Q-o-Q Growth (In %)

AUM (in Rs. Crore)

150,000 9%

100,000 6%

50,000 3%

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

Mar-17 Dec-16 Q-o-Q

Source: AMFI, ICRA Online Research

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 QAAUM of three fastest growing AMCs
below Rs. 15,000 cr
Top Ten Fastest Growing AMCs
100,000 150%
Among the larger AMCs (QAAUM > Rs.

Y-o-Y Growth (in %)

AUM (in Rs. Crore)

80,000 120%
35,000 crore), Kotak Mahindra, DSP
60,000 90% BlackRock, Axis, and L&T Mutual Fund
40,000 60% have shown exceptional growth in corpus
20,000 30%
in FY17
0 0%

Axis Mutual Fund

Quantum Mutual Fund

L&T Mutual Fund

BOI AXA Mutual Fund

Mirae Asset Mutual Fund

Motilal Oswal Mutual Fund

DSP BlackRock Mutual Fund

Kotak Mahindra Mutual Fund

LIC Mutual Fund
Indiabulls Mutual Fund

 Mirae Asset and Indiabulls doubled their

corpus in the last one year and registered
highest % change in QAAUM (Y-o-Y) of
Mar-17 Mar-16 Y-o-Y
138% and 104.6%, respectively

Source: AMFI, ICRA Online Research

Edelweiss AMC was not included in the list of top 10 fastest growing AMCs as its Y-o-Y growth of 312%
was fuelled by the acquisition of JP Morgan AMC
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Private sector joint ventures (predominantly Indian)
manage 58% of QAAUM
Bank
Sponsored_JV_Predomina
Bank ntly Indian Bank Sponsored_Others
Sponsored_JV_Predominantly 9% 8%
Foreign
1%
Institutions_Indian
1%

Private Sector_Foreign
Private 7%
Sector_JV_Predominantly
Indian
58%
Private Sector_Indian
14%

Private Sector_JV_Others
1%

Private Sector_JV_Predominantly
Foreign
1%

Source: AMFI, ICRA Online Research, data pertains to Mar-17

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Section II

INFLOW OUTFLOW ANALYSIS

Investors poured in Rs. 3.4 lakh crore in mutual funds in
FY17
Category-wise Net Inflow/Outflow Industry-wide Net Inflow/Outflow
Q4FY16 Q3FY17 Q4FY17 90,000 79,278

Fund Of Funds Investing Overseas 60,000

in Rs. Crore
29,207
Other ETFs 30,000
Gold ETF
0
ELSS - Equity
-30,000
Gilt
-27,516
Liquid/Money Market -60,000
Q4FY17 Q3FY17 Q4FY16
Balanced
Source: AMFI, ICRA Online Research
Equity

Infrastructure Debt Fund

Income
In Q4FY17, net inflows remained positive in all
categories except Income, Gilt, Gold ETF and FoFs
-50,000 -20,000 10,000 40,000 70,000
investing overseas
in Rs. Crore

Source: AMFI, ICRA Online Research

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 Robust retail participation leads to high infusion
in equity funds
Equity Net Inflow/Outflow
15,000

10,000
in Rs. Crore

5,000

-5,000
Apr-13 Aug-13 Dec-13 Apr-14 Sep-14 Jan-15 May-15 Sep-15 Feb-16 Jun-16 Oct-16 Mar-17

Source: AMFI, ICRA Online Research; Equity includes ELSS funds

 Equity funds (including ELSS) saw net inflow of Rs. 19,558 crore in Q4FY17 vis-à-vis Rs. 28,576 crore in Q3FY17
 In FY17, total inflow in the category has been Rs. 70,367 crore with net inflows in every month
 On an average ~6.3 lakh SIP accounts were added every month in FY17; average ticket size - Rs. 3,200 per account
 In FY17, Rs. 43,921 crore was collected through the SIP route

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Section III

SECTOR UPDATE
Top five sectors constituted ~65% of the total equity AUM

Equity Exposure of Top Five AMCs in Top Five Sectors (as of Mar-17)
30,000
Equity AUM (in Rs. Crore)

20,000

10,000

0
Financial Services Automobile Energy Consumer Goods IT
ICICI Prudential Mutual Fund HDFC Mutual Fund Reliance Mutual Fund Birla Sun Life Mutual Fund SBI Mutual Fund

Source: AMFI, ICRA Online Research

 Financial Services remained the most preferred sector; constituted more than 28% of the equity AUM
 In four out of the top five sectors, mutual funds increased their exposure by more than 45% from last year; only IT saw
a tepid increase of ~8% in its exposure
 Inflows to the Financial Services sector grew more than 62% Y-o-Y

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 Some of the less popular sectors more than doubled their
exposure
Sector wise Inflow in FY17
200,000 150

127.10
160,000 119.94 118.25 120
in Rs. Crore

120,000 90

in %
70.56
65.66 62.36
80,000 58.88 56.48 60
49.55 49.36

40,000 30

0 0
Healthcare Paper Metals Chemicals Energy Financial Fertilisers & Consumer Construction Textiles
services Services Pesticides Goods
Mar-17 Mar-16 % change Y-o-Y

Source: AMFI, ICRA Online Research, net-inflow has been calculated using the market value of the holdings

 In percentage terms Healthcare Services, Paper, and Metals saw the highest AUM growth
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Section IV

CATEGORY PERFORMANCE
 All Equity-Oriented categories posted positive returns
Performance* of Equity-Oriented Mutual Fund Categories
26.99

26.01

25.44
30.00

20.81
20.62

19.97

19.71

17.47

17.23
15.63
Returns (in %)

20.00
13.76

12.64
12.52

12.52
12.18

12.17
11.82
10.65

8.71
10.00

0.00
1 Year 3 Year 5 Year 10 Year
Diversified Funds Global Funds Sector Funds ELSS Index Funds

Source: ICRA Online Research; Data as of Mar-17

*Compound Annualized returns

Key drivers:
 Benchmark indices, Sensex and Nifty, surpassed the 29,000 and 9,000 marks, respectively
 Outcome of state assembly elections held in five states
 Government moving closer towards launching the long-awaited GST
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 Long-Term Debt funds continue to outperform

Performance* of Short-Term Debt Oriented Performance* of Long-Term Debt Oriented

Categories Categories

12.55
9.10

11.90
8.96

8.19
7.80

10.08
10.0 14.0

7.68

9.97
9.93
6.84

9.17
6.51
6.39
6.21

8.52
5.92

8.03
5.67

Returns (in %)
Returns (in %)

7.5 10.5
4.56

5.0 7.0

2.5 3.5

0.0 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; Data as of Mar-17; *Compound annualised returns for periods ≥1 year; Simple annualised returns for <1 year

Key drivers:
 Easy liquidity conditions in the country post demonetisation
 Expectations that the U.S. Fed will follow a gradual rate hike
 Doubts regarding the U.S. President’s ability to increase infrastructure spending and implement tax reforms

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Section V

INDUSTRY INSIGHTS
 Mar-17 witnesses highest monthly folio addition in FY17
Category-wise Folio Count (in Lakhs) Folio Growth in FY17

554.0
543.9
Fund of funds investing overseas 560

537.8
Other ETFs

528.2
520.5
GOLD ETF

Folio (in Lakhs)

512.9
530
Balanced

505.6
498.0
Equity

492.4
489.2
ELSS

484.5
500

480.7
Income
Gilt
Liquid/ Money Market 470

Dec-16

Jan-17
Jul-16

Oct-16
Apr-16

Aug-16

Nov-16
May-16

Jun-16

Sep-16

Feb-17

Mar-17
0 100 200 300 400
Mar-16 Feb-17 Mar-17

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

 As per SEBI data,10.1 lakh folios were added in Mar-17; total folio count reached 5.54 crore, 1.9% higher than Feb-17
 The ELSS category drove the increase; 3.2 lakh folios were added in the month
 The folio count for the Liquid category more than doubled in FY17, suggesting retail investors are looking at this route
for surplus cash deposit

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 B15 locations generate 17% of industry AUM in Mar-17
The Rate of Growth in Assets for T-15/B-15 Equity Participation in T-15/B-15 Locations (as of
Locations Mar-17)
1,750,000 1,548,708 80% 70%
Y-o-Y
1,400,000 60% 53%
36% 1,136,453
in Rs. Crore

47%
1,050,000

in %
40% 30%
700,000 Y-o-Y
309,098 41% 20%
350,000 218,703
0%
0
T-15 B-15
Mar-17 T-15 B-15 Mar-16 Equity Non Equity

AUM Garnered by Different Sources  Activity beyond the top 15 cities (referred to as B-15)
Mar-17 Mar-16 has increased in recent years, suggesting expansion of
the investor base
T-15 B-15 T-15 B-15
 Improved distribution and regulatory changes to the
Associate Distributor 6% 13% 5% 11%
fee structure have helped in increasing participation in
Direct Plan 46% 22% 41% 24% smaller places
Non-Associate Distributor 48% 64% 54% 66%
Source: AMFI

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 Liquidity analysis of last 12 months

Mar-17 Feb-17 Jan-17 Dec-16 Nov-16 Oct-16 Sep-16 Aug-16 Jul-16 Jun-16 May-16 Apr-16

Equity 2.4 2.3 2.4 2.6 2.2 2.2 1.8 1.9 1.7 1.7 1.8 2.0

Speciality 0.0 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1

Gilt 0.1 0.2 0.1 0.1 0.1 0.1 0.0 0.1 0.1 0.1 0.1 0.1

Liquid 16.3 19.5 18.7 16.2 16.7 17.4 17.0 18.9 20.1 19.0 20.3 21.0

Balanced 0.2 0.3 0.3 0.3 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2

ETF 0.4 0.4 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5 0.5

Fund of Funds 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2
Dynamic/Asset
0.3 0.3 0.4 0.3 0.2 0.3 0.3 0.3 0.3 0.2 0.3 0.2
Allocation
Debt 5.6 8.7 8.2 8.2 8.8 9.1 8.3 9.5 9.5 9.3 9.5 10.0
Source: ICRA Online Research

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 Instrument allocation pattern in debt segment
60
56.2

49.9
45.0
45
in %

30

22.3
20.9
17.2 16.6
15
8.8 9.5
7.9 7.5
6.3 6.2
4.9 4.6
2.1 2.1 2.1 1.8 1.8 2.4 2.2
0.4 0.4 0.1 0.3 0.5
0
Equity Bond/Debentures GILT Money Market CD CP Cash Current Assets Others

Mar-17 Dec-16 Mar-16

Source: ICRA Online Research

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 Average maturity increased post demonetisation on
rate-cut expectations; eased as RBI maintained status-quo
Average Maturity Trends in Income, GILT Long-Term & GILT Short-Term Funds
16

12
in yrs

0
Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17

Average Maturity_Income Funds Average Maturity_GILT LT Average Maturity_GILT ST

Source: ICRA Online Research

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 FY17 saw mutual funds match FII inflows
FPI/FII & Mutual Fund Investment Trends in Equity Markets
150,000 140,033

110,540

100,000
79,723
65,041
in Rs. Crore

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

-14,171
-22,678 -20,925

-50,000
FY13 FY14 FY15 FY16 FY17

FPI/FII MF

Source: ICRA Online Research

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 Large Caps command the largest share of assets

Investment Across Market Caps*

100%

80%

60%
in %

40%

20%

0%
Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17

Large Cap Mid Cap Small Cap Debt & Others

Source: ICRA Online Research

*On the basis of MFI market cap classification, only equity diversified funds were considered for analysis

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Section VI

SEBI INVESTOR SURVEY (SIS) 2015

 SEBI conducted its fourth investor survey

 SEBI Investor Survey 2015 (SIS 2015) is the fourth in a series of periodic
studies conducted/sponsored by SEBI to quantify actions and perceptions of
retail investors
 The survey aims to collect information on socio-economic parameters, savings
and investment behavior, reasons for non-investment in securities market and
relation of risks with investment behavior
 This iteration of the study has the largest breadth and depth, covering more
than 200,000 households in the listings exercise and more than 50,000
households in the final survey across cities and villages in all states and Union
Territories (except Lakshadweep)
 Total number of respondents were 50,453, of which 36,756 were urban
respondents and 13,697 were rural respondents

Source: ICRA Online Research 26

ICRA Online Limited
 Bank deposits remain the most preferred investment and
savings vehicle among urban respondents
Investment and Savings Vehicles Used by Survey
Respondents

Commodities Futures 1.0%

Household Awareness of Investment Instruments
Derivatives (Equity/Currency) 1.4%

Equity/Currency Commodity Debentures/Bonds 3.5%

Mutual Funds Equities Debentures
Derivatives Futures Company Deposits 4.3%
Pension Schemes 8.1%
Awareness 28.4% 26.3% 13.1% 10.4% 9.5% Equity/Stocks/Shares 8.1%

Investor Mutual Funds/SIPs 9.7%

84.6% 79.4% 48.2% 33.6% 29.2%
Awareness Real Estate 16.5%

Non-Investor Post Office Saving Schemes 30.1%

18.7% 17.1% 7.0% 2.4% 6.1%
Awareness Precious Metals 30.3%
Life Insurance 61.7%
Bank Deposits 95.0%

0% 20% 40% 60% 80% 100%

N1 = 36,756 (all urban respondents); Respondents could check multiple options

Source: ICRA Online Research 27

ICRA Online Limited
Mutual funds emerged as the most favored market-linked
instrument among urban investors
Preferred Investment Avenues for Respondents with Financial Investments
70% 66.0%
60% 54.9%
50%
40%
in %

30% 23.5%
20%
9.5% 6.9%
10%
0%
Mutual Funds/SIPs Equity/Stocks/Shares Debentures/Bonds Derivatives (Equity/Currency) Commodities Futures
N2 = 5,356 (all urban investors). Respondents could check multiple options

Survey findings:
 42% of the mutual fund investors are regular investors
 60% prefer the SIP route Out of 36,756 urban
 88% are aware of online platforms, although the option is not used frequently respondents, 5,356 or
 24% use exchanges and platforms offered by stock exchanges ~15% were actual
 58% claimed to continue with their investment even during market volatility investors in market-
 25% would hold onto their investments beyond three years linked instruments

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 Risk aversion and inadequate returns keep urban
investors away from mutual funds
Why Do Households not Invest in Mutual Funds?
others
Investment not 6%
very liquid  Sustained and widespread mutual fund
8%
Not sure about information dissemination in India has
safety of ensured that information availability is no
investments
33%
longer a concern
Lack of expertise
13%
 Potential investors are not aware of the
superior risk adjusted returns of mutual
funds and seem to consider savings and
investment instruments independently
Inadequate instead of calculating their optimal weights
information in a diversified portfolio
14%

Inadequate returns
26%

N2 = 5,356 (all urban investors). Respondents could check multiple options

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Despite a high savings propensity, rural respondents avoid
securities markets
Instruments for Savings and Capital Formation Used
Out of 13,697 rural respondents, mere 32 or 0.23% by Rural Households
were actual investors in market-linked instruments,
Pension
possibly due to a lack of awareness Schemes, 2.9%

Company
Deposits, 3.9%

Survey findings: Real Estate,

6.0%
 Almost all respondents were aware of bank deposits
Precious
 88% and 76% were aware of life insurance and post Metals, 10.7%

office savings, respectively Post Office

Savings, 28.9%
 1.4% were aware of mutual funds and equities
Life Insurance,
 Less than 0.5% were cognizant of futures, 47.2%

derivatives, or debentures Bank Deposits,

95.1%

0% 20% 40% 60% 80% 100%

N3=13,697 (all rural respondents)

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Section VII

REGULATORY UPDATE
 Regulator remains pro-active during the quarter
SEBI allows mutual funds to
invest in REITs and InvITs
SEBI reviews advertisement
guidelines of mutual funds
Source: Media Reports
 SEBI has allowed mutual funds to invest in Real Estate
Investment Trusts (REITs) and Infrastructure Investment Trusts
(InvITs) to make these investment tools more attractive for
investors. As per the norm, no mutual fund under all its schemes
shall own more than 10% of units issued by a single issuer of
REIT and InvIT
 Regarding advertisement of the mutual fund scheme
performance, SEBI has instructed asset management companies
to advertise their returns in terms of Compounded Annualized
Growth Rate (CAGR) for the past one year, three years, five
years, and since inception. However, where the scheme has been
in existence for less than one year, past performance shall not be
provided. A point-to-point returns chart on a standard investment
of Rs. 10,000 must be given to help investors understand the
scheme better
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 Contact Information

Saugat Acharya Atul Sharma Eshna Basu

+91 98209 74940 +91 96191 12544 +91 98318 27490
saugat.acharya@icraonline.com atul.sharma@icraonline.com eshna.basu@icraonline.com

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