Page 20 - Banking Finance June 2023

MUTUAL FUND

inflow of Rs. 1.56-lakh crore logged in present. This is relatively lower as The investment objective of the
FY23, according to data from the As- compared to the industry average of scheme is to provide returns that, be-
sociation of Mutual Funds in India. around 15-16 per cent (share of SIP to fore expenses, correspond to the total
industry's total AUM). return of the securities as represented
Interestingly, the net to gross ratio of
by the underlying index, subject to
SIPs has strengthened from 38 per cent
tracking error.
in FY'22 to 54 per cent in FY'23. HNIs embracing passive
The scheme will invest 95-100% in se-
This reflects the fact that industry has funds on under-perfor-
curities covered by the S&P BSE Hous-
not only succeeded in adding new SIP
mance of active funds ing Index and 0-5% in debt/ money
accounts but also managed to retain
some of the ongoing SIPs despite pro- High networth individuals (HNIs) are market instruments including tri-party
increasingly lapping up passive funds, repo on government securities or trea-
viding the option of pause in SIP.
with their exchange-traded fund asset sury bills and units of liquid mutual
NS Venkatesh, CEO, AMFI, said the in-
base registering a 66 per cent growth funds.
dustry provided the option of pause
to Rs 34,000 crore in 2022-23, accord-
during the Covid pandemic for inves-
ing to a report. HNIs are informed in- Sebi proposes big changes
tors who were between jobs. However,
vestors, and hence, use platforms that
he said if the pause on SIP continues to mutual fund fees to
allow direct investing in passive funds.
for three months it is treated as dis-
bring down costs
Moreover, passive investments are
continued.
comparatively more attractive than The capital markets regulator has pro-
active investments owing to their ease posed sweeping changes to the way
LIC MF hopeful of growing
of investing, better liquidity, and lower mutual funds charge fees to investors
AUM to Rs. 27,000 crore by cost. for managing their money. The Securi-
ties and Exchange Board of India said
end of FY24 According to a report by Motilal Oswal
in a discussion paper, that mutual funds
Financial Services, HNIs' ETF AUM rose
LIC Mutual Fund (LICMF), which is hope-
must make the total expense ratio -
ful of completing the proposed merger to Rs 34,000 crore in FY23 from Rs
the annual fee that these asset man-
20,400 crore in FY22, indicating a
with IDBI Mutual Fund by the first half
agers collect from unit holders - uni-
of this fiscal, is looking to increase the surge of 66 per cent. It was at Rs
form for scheme categories such as
share of equity AUM (assets under 13,700 crore in 2020-21 and Rs 7,500
equity or debt.
management) to its overall business to crore in 2019-20.
The regulator has also suggested bring-
close to 50 per cent in the short-to-
ing the Goods and Service Tax (GST) on
medium term. It is also looking to grow
UTI Mutual Fund launches investment and advisory fees charged
the SIP (systematic investment plan)
UTI S&P BSE Housing In- by mutual funds from investors and
portfolio by attracting more retail in-
brokerages, along with transaction
vestors by ramping up the distributor dex Fund
costs that these fund houses pay insti-
network.
UTI Mutual Fund has launched UTI S&P tutional broking firms for trade execu-
At the end of 2022-23, LICMF's AUM BSE Housing Index Fund, an open- tion and incentives for selling beyond
stood at around Rs. 17,600 crore. Eq- ended scheme replicating/tracking the top 30 cities into the proposed to-
uity accounted for around 45 per cent S&P BSE Housing Total Return Index tal expense ratio (TER) slabs. Sebi has
of the total AUM at close to Rs. 8,000 (TRI). also proposed to introduce a perfor-
crore while the remaining Rs. 9,600 mance fee that mutual funds can
The performance of the scheme will be
crore came from debt schemes. charge investors for superior returns.
benchmarked against S&P BSE Hous-
According to TS Ramakrishnan, MD & ing TRI. The scheme will be managed The recommendations are aimed at
CEO, LICMF, the share of SIP to the by Sharwan Kumar Goyal and Ayush bringing down mis-selling and reducing
total AUM is close to 13 per cent at Jain. costs of investing in mutual funds.
18 | 2023 | JUNE | BANKING FINANCE