Mutual Fund Screener For the quarter ended Mar-18

Mutual Fund Screener For the quarter ended Mar-18

Mutual Fund Screener What s Inside 01 Industry 02 Investor 03 Inflow Outflow 04 Sector Size Trends Analysis Update 05 Category Performance 06 Industry Insights 07 Regulatory Update

Section I INDUSTRY SIZE

Industry QAAUM up 3% - crosses Rs. 23 lakh crore QAAUM (In Rs. Crore) 24,00,000 18,00,000 12,00,000 6,00,000 0 Mutual Fund Industry (QAAUM) Mar-17, 18,29,583 Dec-17, 22,36,717 Mar-18, 23,05,212 Mar-17 Dec-17 Mar-18 Source: AMFI, ICRA Online Research Note: QAAUM Quarterly Average Assets Under Management Rs. 68,495 crore added in Q4FY18 Growth trend of AMCs for the quarter ended Mar-18 AMCs Range Top 5 0.5% to 6% Next 10-5% to 10% Rest -15% to 35% Source: AMFI, ICRA Online Research Note: QoQ growth of QAAUM as of Mar-18 Industry Quarterly Average Assets Under Management (QAAUM) grew for the 18 th consecutive quarter in Q4FY18 - The 3.1% quarterly growth in industry assets was driven by benign capital markets for most part of the fiscal; investor awareness campaigns like Mutual fund sahi hai ; and strong retail participation, especially from B-15 investors ICRA Online Limited 4

Top 10 AMCs account for ~81% of QAAUM Top 10 AMCs 3,50,000 QAAUM Rs. 3 lakh crore QAAUM Rs. 2 lakh crore and < Rs. 3 lakh crore 10% AUM (In Rs. Crore) 2,80,000 2,10,000 1,40,000 QAAUM Rs. 1 lakh crore and < Rs. 2 lakh crore 8% 6% 4% QoQ Growth (In %) 70,000 2% 0 ICICI HDFC Mutual Prudential Fund Mutual Fund Aditya Birla Sun Life Mutual Fund Reliance Mutual Fund SBI Mutual Fund UTI Mutual Fund Kotak Mahindra Mutual Fund Franklin Templeton Mutual Fund DSP BlackRock Mutual Fund Axis Mutual Fund 0% Mar-18 Dec-17 % Change QoQ Source: AMFI, ICRA Online Research ICRA Online Limited 5

Smaller AMCs grow at a faster pace 2,50,000 Top 10 Fastest Growing AMCs Mar-18 Mar-17 % Change YoY 125% AUM (In Rs. Crore) 2,00,000 1,50,000 1,00,000 50,000 100% 75% 50% 25% YoY Growth (In %) Among the larger AMCs (QAAUM > Rs. 35,000 crore), SBI and L&T Mutual Fund have shown tremendous growth in assets 0 0% SBI Mutual Fund L&T Mutual Fund Motilal Oswal Mutual Fund Mirae Asset Mutual Fund Edelweiss Mutual Fund IDBI Mutual Fund BOI AXA Mutual Fund Mahindra Mutual Fund PPFAS Mutual Fund IIFL Mutual Fund QAAUM of eight fastest growing AMCs below Rs. 20,000 crore Source: AMFI, ICRA Online Research ICRA Online Limited 6

Private sector JVs (predominantly Indian) manage ~55% of Q4FY18 QAAUM Category As a % of Q4FY18 QAAUM QAAUM (In Rs. Crore) Growth Q4FY18 Q4FY17 Q4FY16 Year 1 Year 2 Joint Ventures - Predominantly Indian 10.3% 236,474 170,901 118,822 38.4% 43.8% Bank SponsoredJoint 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 ICRA Online Limited 7

Section II INVESTOR TRENDS ICRA Online Limited 8

MF industry adds 48.6 lakh folios in Q4FY18 Category-wise Folio Count (In Lakhs) Folio Growth in Last 12 Months FoF investing overseas Other ETFs Gold ETF Balanced Equity ELSS Income Gilt Folio Count (In Lakhs) 750 700 650 600 550 500 561.4 571.9 582.3 594.2 608.5 620.5 631.7 649.2 664.9 683.3 699.0 713.5 20 15 10 5 0 1 Month Change (In Lakhs) Liquid/ Money Market Folio Count (In Lakhs) 0 125 250 375 500 Mar-18 Feb-18 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Folio Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 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) ICRA Online Limited 9

B-15 locations generate ~19% of industry assets in Mar-18 AUM (In Rs. Crore) Growth in Assets in T-15/B-15 Locations Mar-18, 20,00,000 18,44,190 Mar-17, 15,48,708 15,00,000 10,00,000 5,00,000 0 Mar-18, 4,26,436 Mar-18 T15 B15 Mar-17, 3,09,098 Mar-17 100% 75% 50% 25% 0% Equity/Non-equity Asset Mix in T-15/B-15 Locations 60% 40% 62% 38% 31% 69% 54% 46% T15 B15 T15 B15 Mar-18 Equity Non-equity Mar-17 AUM Garnered by Different Channels Mar-18 Mar-17 T-15 B-15 T-15 B-15 Direct Plan 46% 20% 46% 22% Associate Distributor 6% 17% 6% 13% Non-Associate 48% 64% 48% 64% Distributor Source: AMFI, ICRA Online Research The country s smaller towns or B-15 (beyond top 15 cities) locations accounted for 18.8% of the total industry AUM at the end of Mar-18 In the last 12 months, B-15 towns have witnessed AUM growth of 38% or Rs. 1.17 lakh crore to reach Rs. 4.26 lakh crore ICRA Online Limited 10

Section III INFLOW OUTFLOW ANALYSIS

Investors pour in close to Rs. 38,000 crore in Equity MFs in Q4FY18 Category-wise Net Inflow/Outflow Q4FY18 Q3FY18 Q4FY17 75,000 Industry-wide Net Inflow/Outflow 67,499 Fund Of Funds Investing Overseas Other ETFs Gold ETF In Rs. Crore 50,000 25,000 13,225 29,207 ELSS - Equity Gilt Liquid/Money Market Balanced Equity Infrastructure Debt Fund Income -70,000-35,000 0 35,000 70,000 In Rs. Crore 0 Q4FY18 Q3FY18 Q4FY17 Source: AMFI, ICRA Online Research In Q4FY18, net inflow in the Equity category (including ELSS) was Rs. 38,315 crore compared with Rs. 19,558 crore in Q4FY17, mainly driven by Systematic Investment Plans (SIPs). In FY18, cumulative SIP contribution was Rs. 67,190 crore, up from Rs. 43,921 crore in FY17 Source: AMFI, ICRA Online Research ICRA Online Limited 12

Robust retail participation leads to high infusion in Equity funds 21,000 Equity Net Inflow/Outflow In Rs. Crore 15,000 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 ICRA Online Limited 13

Section IV SECTOR UPDATE

Top 5 sectors constitute about 50% of the total Equity AUM Equity AUM (In Rs. Crore) 32,000 24,000 16,000 8,000 Equity Exposure of Top 5 AMCs in Top 5 Sectors (Mar-18) 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% ICRA Online Limited 15

Banks and Finance sectors remain fund managers favourites* Sector-wise Inflow 1,80,000 Mar-18 Mar-17 % change 125% 130% In Rs. Crore 1,35,000 90,000 45,000 31% 77% 44% 36% 59% 98% 26% 41% 24% 104% 78% 52% 26% 0 0% Banks Finance Consumer Non Durables Software Construction Project Power Auto Auto Ancillaries Non - Ferrous Metals Petroleum Products % Change YoY Source: AMFI, ICRA Online Research Note: Only top-10 sectors considered, *Increase in exposure is in absolute terms ICRA Online Limited 16

Section V CATEGORY PERFORMANCE

Equity-oriented MF performance dwindles as markets take a hit Performance* of Equity-Oriented Mutual Fund Categories Returns (In %) 20 15 10 5 11.7 14.8 12.1 12.4 11.0 10.1 7.8 9.0 9.8 7.0 19.0 13.2 18.1 18.6 13.2 12.0 10.5 11.4 7.9 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 ICRA Online Limited 18

Debt-oriented categories post muted returns Performance* of Short-term Debt-oriented Categories Performance* of Long-term Debt-oriented Categories Returns (In %) 8 6 4 2 6.9 7.1 6.5 6.6 6.1 4.4 6.6 6.7 6.1 7.3 7.6 7.5 Returns (In %) 9 6 3 5.4 2.9 7.4 7.0 8.0 8.2 7.8 8.1 0 3 Months 6 Months 1 Year 3 Years Liquid Funds Ultra Short-Term Funds Short-Term Funds 0 1 Year 3 Years 5 Years 10 Years 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 ICRA Online Limited 19

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 In Rs. Crore 1,00,000 50,000 79,723 40,281 65,041 52,977 54,912 26,021 0-50,000-22,678-20,925-14,171 FY13 FY14 FY15 FY16 FY17 FY18 FPI/FII MF Source: ICRA Online Research ICRA Online Limited 21

Large-Caps continue to command the largest share of assets 100% Investment Across Market Caps* 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 ICRA Online Limited 22

Instrument allocation pattern in Debt segment 75% 71.58% 50% 72.05% 70.38% 25% 0% 3.12% 5.62% 3.15% 7.47% 4.38% 3.12% 7.69% 6.65% 5.41% 4.03% 6.23% 6.69% 1.37% 1.28% 2.24% Bond/ Debenture 0.01% Cash & Equivalents 0.02% CD 0.00% 4.22% 4.58% 7.63% 0.03% 0.86% 0.18% CP Gilt Others REITs & InvITs SDL T-Bill In % Mar-18 Dec-17 Mar-17 Source: ICRA Online Research ICRA Online Limited 23

Average maturity remains steady in Q4FY18 12 Average Maturity Trends in Income, Gilt Long-Term & Gilt Short-Term Funds Average Maturity (In Years) 8 4 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 ICRA Online Limited 24

Section VII REGULATORY UPDATE

Regulator remains vigilant (1 of 2) Date SEBI mandate Effective from Brief Earlier practice Impact on retail investors 02-Feb-18 Disallows charging additional expenses of Immediate effect (02-Feb-18) AMCs cannot charge additional expenses of up to 0.2% of daily net assets for schemes where exit load is not levied/not applicable (includes closeended schemes) AMCs charge up to 0.2% of daily net assets for additional expenses, incurred towards different heads Has lowered the cost of investments 02-Feb-18 Allows additional Total Expense Ratio (TER) to be charged only for B-30 locations 01-Apr-18 1. Definition of top cities and beyond top cities has been revised. The T-15 and B-15 would be replaced by T-30 and B-30 2. Additional TER of up to 30 basis points would be allowed for inflow from beyond top 30 cities (B-30) instead of beyond top 15 cities (B-15) AMCs charge additional TER up to 30 basis points on daily net assets of the scheme if the new inflow from B-15 cities are at least (a) 30% of gross new inflows in the scheme or (b) 15% of the average AUM (year to date) of the scheme, whichever is higher 1. Has lowered the cost of investments 2. Penetration of mutual fund beyond top 30 cities Source: SEBI ICRA Online Limited 26

Regulator remains vigilant (2 of 2) Date SEBI mandate Effective from Brief Earlier practice Impact on retail investors 05-Feb-18 Changes AMCs disclosure norms for TER 01-Mar-18 1. AMCs need to disclose Total Expense Ratio (TER) of all schemes under a separate head on their website on daily basis; downloadable in spreadsheet AMCs disclosed monthly TER in factsheets Has provided greater transparency and 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 disclosure norms for consolidated / merged schemes 01-May-18 SEBI provided a framework for performance disclosure of schemes post consolidation/merger. While different formats for different scenarios are prescribed, the common theme is AMCs will have to disclose the weighted average performance of both the new and old schemes No specific norms for disclosing the performance of a surviving scheme post merger Has provided greater transparency and uniformity Source: SEBI ICRA Online Limited 27

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