So, has the no entry load regulation hit the growth of mutual funds in the country?
The MF industry has been crying hoarse in recent months blaming the regulation for stagnant growth, but the good performance of several large schemes flies in the face of this logic.
A look at the top 10 schemes by assets under management (AUM) reveals that HDFC MF is the star performer in an industry that is under pressure. HDFC Top 200 and HDFC Equity have seen a rise in their AUM by R4,144 crore or around 35 per cent over the six months from March to August. HDFC Prudence—its hybrid scheme— also saw a R1,381 crore rise in its AUM in the same period.
The performance of HDFC equity schemes is way higher than the next in line — Reliance Growth and Reliance Regular Savings — that have a combined inflow of R2,040 crore.
The AUM for open-ended schemes across the industry rose by 11.5 per cent from R162,335 crore to R181,051 crore. Interestingly, in the same period the BSE 100 index rose by 10.5 per cent — indicating that most of the gains are a result of the rise in markets.
"Large is not the only criteria that investors are looking for while investing in a fund house. It is large-sized schemes with long track records that are attracting investments," said a senior official with a mid-sized mutual fund.
Experts say that due to weak presence of distribution channels, investors are going with known names.
"A large number of investors are going with familiar names and schemes that have top of the mind recall along with good performance," said Prasunjit Mukherjee, CEO, Plexus Management Services, a Mutual Fund research and advisory company.