Which are the most popular direct plan mutual funds?

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Ever wondered which are the most popular direct plan mutual funds? This is a list of the largest (AUM wise) equity and debt direct plan funds. The data is sourced from AMFI and is as on Sep 2018. The post is inspired by a series of questions by Anath at Facebook group, Asan Ideas for Wealth and several other unsubstantiated opinions about fund popularity.

For the uninitiated, direct plan refers to funds which do not pay commissions from your investment value every day to distributors. The opposite of a direct plan is the regular plan. In this case, a commission is removed from your investment value every day along with expenses for the scheme before the NAV is declared. See this to understand how it makes a difference: Illustration: Direct Mutual Funds vs. Regular Mutual Funds

Is it right to assume that a fund with higher AUM is popular? In the case of direct plans, I think so. Many funds often have a social buzz. That is many people talk about it in a good or bad way. That does not mean they or anyone else have enough money in it. AUM is a quantifiable source of popularity. In the case of regular plans, popularity only means the bank or the distributors are “motivated enough” to push it more.

One can argue that the direct fund investment portal that offers fund suggestions may influence the choices of direct plan investors. This may well be the case in future, but as of now, I am sure you will agree that this is not the case.

Another important point that direct plan investors should keep in mind is the fact that the AUM you see in portals like Value Research is the sum of the regular plan and direct plan AUM. This can pretty misleading in some cases.

Take the case of ICICI Nifty Next 50 Index fund. This has a total AUM of  271.96 Crores. One might assume that much of this fund’s AUM comes from the direct plan.  This is indeed correct. The direct plan AUM (growth + dividend option) accounts for 63.8% of the total aum, and this is impressive. How much of this is due direct plan portals is unknown.

On the other hand, take UTI Nifty Next 50 Index fund which is only a few months old and already has 235 crores. Only 24.7% of this comes from the direct plan. The AMC had possibly asked distributors to push the fund, especially in the NFO period. God bless the investor who wishes to invest in the regular plan of an index fund!

Another interesting case is ICICI Equity Arbitrage. The direct plans (growth + dividend + bonus*) make up for 57% of the total AUM. The dividend option of the direct plan constitutes 47% of the total AUM!  The regular plan dividend option only constitutes 32% of the AUM! One can only guess that the direct plan dividend investors are high net worth individuals (HNIs) who do not mind paying the 10% tax on equity dividends. * I do not know why there is a bonus option listed only for the direct plan!

The point is that investors who wish to gauge popularity should look at the regular plan to direct plan break up in AUM. Members of FB group Asan Ideas for Wealth are especially guilty of assuming things based on a couple of threads. Many assume PPFAS and QLTE are popular among direct plan investors and this cannot be more wrong.

On Sunday I asked members of said group to guess (without any research) which direct plan equity fund had the highest AUM. Many responses were close, and six people gave the right answer. As mentioned, the first two guesses will receive a small prize (along with the admin for allowing it 🙂 ) Sudipta Badapanda and Amit Makhija.

Looking at the list of direct plan equity funds, one thing should be clear. Much of the AUM has come from regular plan investors who have switched to direct over the last five years and continued to invest in it. If the direct fund portals take off in a big way, this dynamic could change, and we might see more cases like ICICI Nifty Next 50 Fund. However, for this to happen, the regular AUM slice, on the whole, should decrease. I think it will in 5-10 years depending on how the markets behave.

Which are the most popular direct plan mutual funds?

List of most popular direct plan equity funds

This list (and the one below) is sourced from AMFI and is provided on a “fair use” basis with attribution for educational and research purposes in public interest.

Please note that I have ranked funds in descending order of AUM without adding the growth option and dividend option AUM.  IMO it will not alter the rankings by too much for equity funds (the arbitrage fund rankings might change a bit). In any case, the first five spots will remain unchanged. So in what you see, unless specified otherwise, the scheme refers to growth option.

HNIs and perhaps institutions are responsible for a good chunk of the AUM in direct plans of arbitrage funds. There are 38 funds having an direct AUM more than 1000 Crore.

Scheme Name Average AUM (Crores)
HDFC Equity Fund 6020.21
Aditya Birla Sun Life Frontline Equity Fund 4864.11
Kotak Standard Multicap Fund 4734.67
SBI BLUE CHIP FUND 4693.52
ICICI Prudential Bluechip Fund 4387.30
ICICI Prudential Equity Arbitrage Fund  – Dividend 3699.71
Kotak Equity Arbitrage Fund -Fortnightly 3509.91
HDFC Hybrid Equity 3278.05
Reliance Arbitrage Fund- Monthly dividend Plan 2742.61
ICICI Prudential Value Discovery Fund 2708.62
HDFC Mid Cap Opportunities Fund 2597.12
Aditya Birla Sun Life Arbitrage Fund – Dividend 2479.45
ICICI Prudential Equity & Debt Fund 2180.36
Franklin India Equity Fund 2070.28
ICICI Prudential Balanced Advantage Fund 1958.66
HDFC Top 100 Fund 1940.76
Franklin India Bluechip Fund 1791.19
Aditya Birla Sun Life Equity Fund 1717.20
HDFC Balanced Advantage Fund 1704.32
Kotak Equity Arbitrage Fund – Dividend 1600.88
Franklin India Focused Equity Fund 1499.48
Franklin India Smaller Companies Fund 1479.60
Axis Long Term Equity Fund 1387.68
HDFC Arbitrage Fund Wholesale Plan Dividend Option 1275.97
Reliance Multi Cap Fund 1215.77
SBI Arbitrage Opportunities Fund  – DIVIDEND 1178.68
SBI Magnum Multicap Fund 1157.44
Kotak Equity Arbitrage Fund 1155.89
HDFC Small Cap Fund 1148.58
L&T Emerging Businesses Fund 1145.12
Reliance Large Cap Fund 1145.04
HDFC Balance Advantage Fund  – Dividend Option 1133.79
Aditya Birla Sun Life Equity Advantage Fund 1133.28
ICICI Prudential Multi-Asset Fund 1127.67
IDFCArbitrage Fund-Monthly Dividend 1119.04
SBI MAGNUM GILT FUND 1083.52
Reliance Small Cap Fund 1079.02
Aditya Birla Sun Life Focused Equity Fund 1007.70
Aditya Birla Sun Life Equity Hybrid’95 Fund 987.84
Parag Parikh Long Term Equity Fund 992.31
SBI EQUITY HYBRID FUND 957.29
HDFC Arbitrage Fund Wholesale Plan Monthly Dividend Option 939.04
L&T India Value Fund 844.65
DSPFocus Fund 838.86
Reliance Arbitrage Fund 831.08
Quantum Long Term Equity Value Fund 825.70
Tata India Tax Savings Fund 820.95
Franklin India Prima Fund 809.53

List of most popular direct plan debt funds

In this case, the list is dominated by liquid funds due to institutional funds. There are many credit risk funds too perhaps because of HNI money? Retail participation in direct plan debt fund is not as high as in the case of equity (source AMFI reports).

The most popular direct plan debt fund has 5.8 times the AUM of its equity counterpart! There are 93 funds with direct AUM of more than 1000 crores. In this case, the dividend option may influence the rankings but there are too many dividend options (monthly weekly, quarterly, general) and it is too much work to add them all!

Scheme  Name Average AUM (Crores)
Aditya Birla Sun Life Liquid Fund 34615.29
SBI Liquid Fund 28596.44
ICICI Prudential Liquid Fund 28413.53
HDFC Liquid Fund 27664.97
Reliance Liquid Fund 25646.63
UTI-Liquid Cash Plan 24096.51
DSPLiquidity Fund 16418.04
Kotak Liquid 16139.52
Axis Liquid Fund 15310.41
Tata Liquid Fund 14104.18
Aditya Birla Sun Life Savings Fund 10889.67
Aditya Birla Sun Life Corporate Bond Fund 10865.43
L&T Liquid Fund 10823.53
HDFC Corporate Bond Fund 9400.804
IDFC Cash Fund 9153.899
ICICI Prudential Savings Fund 8942.688
Invesco India Liquid Fund 8777.917
IDFC CBF_Direct Plan_Growth 8534.492
ICICI Prudential Liquid Fund  – Daily Dividend 8417.805
Reliance Short Term Fund 8011.791
SBI Liquid Fund  -Daily Dividend 7804.961
Reliance Low Duration Fund 7795.236
Kotak Bond Short Term Plan-(Growth) 7140.303
UTI – Short Term Income Fund -Institutional 6419.813
UTI – Treasury Advantage Fund – Institutional 6288.717
UTI-Liquid Cash Plan  – Daily Dividend Option 6162.252
HDFC Short Term Debt Fund 6079.536
HDFC Floating Rate Debt Fund 5963.631
Kotak Savings Fund 5429.894
Aditya Birla Sun Life Liquid Fund – Daily Dividend 5263.392
Reliance Floating Rate Fund 5145.698
Sundaram Money Fund 5137.004
ICICI Prudential Short Term Fund 4418.042
SBI SHORT TERM DEBT FUND 4257.473
Aditya Birla Sun Life Floating Rate Fund-Long Term Plan-Direct Plan 4186.727
SBI MAGNUM LOW DURATION FUND 4131.79
ICICI Prudential Banking and PSU Debt Fund 4034.811
Axis Short Term Fund 4005.467
Reliance Prime Debt Fund 3968.614
Franklin India Ultra Short Bond Fund – Super Institutional Plan 3914.585
ICICI Prudential Floating Interest Fund 3862.896
ICICI Prudential Money Market Fund Option 3855.913
IDFC Bond Fund – Short Term Plan 3750.686
Aditya Birla Sun Life Banking & PSU Debt Fund 3738.216
ICICI Prudential Corporate Bond Fund 3719.508
HDFC Liquid Fund – Daily Dividend Option 3550.354
HDFC Credit Risk Debt Fund Option 3450.669
Reliance Liquid Fund  Daily Dividend Reinvestment Option 3429.688
Tata Short Term Bond Fund 3371.88
Aditya Birla Sun Life Money Manager Fund 3259.421
DSPLow Duration Fund 3126.946
IDFC Low Duration Fund 2531.419
Reliance Banking& PSU Debt Fund Plan- 2495.577
Franklin India Liquid Fund – Super Instittutional 2473.465
DSPShort Term Fund 2375.121
Kotak Liquid – Daily Dividend 2355.314
Franklin India SHORT TERM INCOME PLAN 2266.005
ICICI Prudential Credit Risk Fund 2195.691
HDFC Banking and PSU Debt Fund 2149.514
HDFC FMP 1114D MARCH 2016 (1) Option 2139.138
Tata Treasury Advantage Fund 2080.49
UTI – Ultra Short Term Fund 2078.048
Kotak Money Market Scheme – (Growth) 2042.641
L&T Short Term Bond Fund- Growth 2024.766
Reliance Credit Risk Fund Plan 2011.549
SBI MAGNUM ULTRA SHORT DURATION FUND 1937.07
Reliance Strategic Debt Fund 1931.751
Aditya Birla Sun Life Low duration Fund 1904.88
SBI MAGNUM LOW DURATION FUND  – DAILY DIVIDEND 1853.151
Aditya Birla Sun Life Credit Risk Fund 1824.866
Axis Liquid Fund  – Daily Dividend Option 1776.433
Aditya Birla Sun Life Medium Term Plan 1775.979
DSPUltra Short Fund 1686.316
Invesco India Short Term Fund 1659.945
Kotak Low Duration Fund- 1637.27
ICICI Prudential Bond Fund 1602.227
Axis Treasury Advantage Fund 1507.434
Aditya Birla Sun Life Dynamic Bond Fund 1483.38
UTI MMF 1452.489
Franklin India Low Duration Fund 1416.435
DSPLiquidity Fund  – Daily Dividend 1328.44
ICICI Prudential Savings Fund  – Daily Dividend 1297.79
HDFC Floating Rate Debt Fund  – Monthly Div 1233.049
HDFC FMP 1167D January 2016 (1) Option 1227.622
ICICI Prudential Medium Term Bond Fund 1204.079
HDFC Low Duration Fund-Direct Plan 1200.499
Reliance Fixed Horizon Fund XXXVIII- Series 6  Option 1198.456
Reliance Liquid Fund – Cash Plan Plan 1161.554
UTI Credit Risk Fund 1153.235
IDFC Bond Fund – Medium Term Plan-Direct Plan 1081.109
DSPBanking & PSU Debt Fund 1073.724
IDFCDynamic Bond Fund-Direct Plan 1062.342
Kotak Credit Risk Fund 1043.808
L&T Ultra Short Term Fund-Direct Plan 973.5448
SBI DEBT FUND SERIES C -15 (91 DAYS) 969.1325
Reliance Yearly Interval Fund – Series 1 Plan 969.0156
ICICI Prudential All Seasons Bond Fund 961.9214
Tata Money Market Fund- Growth 959.0258
Tata Liquid Fund-Daily Dividend 947.0427
HDFC Money Market Fund 939.2151
SBI BANKING & PSU FUND 911.9792
Kotak Money Market Scheme – (Daily Dividend) 862.479
DSPCredit Risk Fund 861.5198
Franklin India Credit Risk Fund 853.9758
Invesco India Treasury Advantage Fund 832.1517
Sundaram BANKING AND PSU DEBT FUND 827.9881
HDFC FMP 1158D February 2018 (1)-Direct Option Option 815.2375

What are your impressions?

What do you make out of this list? Is it as per your expectations or were there surprises? Let me know in the comments section.

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About the Author M Pattabiraman author of freefincal.comM. Pattabiraman is the co-author of two books: You can be rich too with goal based investing and Gamechanger. “Pattu” as he is popularly known, publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis, including a robo advisory template for use by beginners. Contact information: freefincal {at} Gmail {dot} com He conducts free money management sessions for corporates (see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints.

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6 Comments

  1. How can I join the facebook group mentioned in the article? I think it will be wonderful to learn from experts there.

    1. Mirae funds are not in the list at all!! Mirae emerging blue chip and Indoa equity funds have been outperforming the benchmark.Any specific reason?

  2. Sir
    How will the returns of a direct investor be affected by knowing the split of regular versus direct

    Do we mean that the AMC AUM with larger percentage of regular part will give lesser return?

    Since direct.option came around 2013, the regular to direct component will always be in favor of regular at present, especially the older established funds with larger AUM

    Please enlighten and oblige
    Thanks
    Pradeep

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