Reliance MF holds highest AUM in direct plans

UTI Mutual Fund held the second position with direct AUM of Rs. 218 billion

July 30, 2013 3:21 IST | India Infoline News Service
Reliance Mutual Fund held the highest AUM (assets under management) under direct plans in the June quarter at Rs. 224 billion compared to Rs. 110 billion in the previous quarter, according to a study by CRISIL Research.

UTI Mutual Fund held the second position with direct AUM of Rs. 218 billion followed by ICICI Prudential Mutual Fund at Rs. 213 billion, it added.

In future, more institutional investors and high networth individuals are likely to shift to direct plans as these investors are far more capable at taking informed investment decisions. Retail investors too could start shifting to these plans as awareness about the benefits of these plans increases. Retail investors can use mutual fund rankings in the public domain and invest directly in top ranked funds.

Average AUM of direct plans offered by mutual funds rose by almost 70% to Rs. 2.14 trillion during the June quarter from Rs 1.27 trillion in the March quarter.

Direct plans came into existence after the Securities and Exchange Board of India asked fund houses to provide investors with direct access to mutual fund schemes sans any distributor costs.

Direct plans enable investors to invest directly through the fund house instead of distributors. The total expense ratio of direct plans is lower than that of regular plans to the extent of distribution costs. Returns from these plans are thus higher than returns from regular plans.

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