Fund managers should eat their own cooking.
Ever since SEBI mandated mutual fund houses to disclose how much fund managers, directors of the asset management company and other key employees invest their own money into their schemes, the data has become an important parameter to rate overall stewardship of funds.
For, this gives us a clear picture on whether they have "skin in the game" -- or whether they put their money where their mouth is.
Here's the latest analysis of the Indian mutual fund industry, which shows if your fund manager is investing in the same schemes along with you.
The data analysed was for the largest 100 equity and hybrid mutual funds which comprise of total assets of Rs. 7,91,481 crore as of July 31st, 2018. The data was collated and analysed by Outlook Asia Capital.
|Total investment by fund managers in own schemes||Investment by other key personnel||Investment by AMC board directors.|
|234 crore||222 crore||1205 crore|
While several fund managers and CEOs talk about passive investing and ETFs, they hardly invest in their companies' index funds and ETFs.
Most of fund managers' investments are in their active funds -- encouragingly demonstrating that they believe these funds will be able to generate alpha, or excess returns over the benchmark.
The mutual fund scheme that has the largest investment by its fund managers is ICICI Prudential Balanced Advantage Fund, with an investment value of Rs 53.58 crore.
The scheme that has the largest investment by its key employees is HDFC Infrastructure Fund: Rs 30.57 crore. While it is not explicitly stated, this investment in HDFC Infrastructure Fund could largely be from HDFC AMC CIO Prashant Jain.
The mutual fund scheme, which has the largest investment by the AMC board directors is Motilal Multicap 35 Fund, with an investment value of Rs 414.55 crore.
Prashant Jain has a total investment value of Rs 77.95 crore (excluding any investment in HDFC Infrastructure Fund), which is predominantly put in equity schemes.
ICICI Prudential's S Naren, along with his co-fund managers, has an investment of approximately Rs 102 crore in hybrid asset allocation schemes. Clearly, managers of both these fund houses eat their own cooking.
There are a total of 32 schemes out of the top 100, in which fund managers have no investments of their own, and another 18, where the investment is less than Rs 10 lakh. Thus almost 50 percent of these schemes have negligible investment by their own fund managersHere's the list of the 50 largest funds and the total investments in them by the fund manager, key employees and AMC Directors.
|Fund||Total AUM (Rs. Cr)||Fund Manager||Own Fund Manager Investment||Key Employees (incl CEO)||AMC Directors|
|SBI Nifty ETF||38,883||Raviprakash Sharma||-||-||-|
|HDFC Balanced Advantage||37,850||Prashant Jain||27.19||5.25||2.00|
|ICICI Pru Equity & Debt||28,633||S. Naren / Atul Patel / Manish Banthia||14.14||1.01||14.24|
|ICICI Pru Balanced Advantage||28,547||S. Naren /Rajat Chandak / Manish Banthia / Ihab Dalwai||53.58||3.35||62.46|
|SBI Equity Hybrid||26,376||Rama Srinivasan / Dinesh Ahuja||0.58||0.07||0.36|
|HDFC Hybrid Equity||22,762||Chirag Setalvad||-||1.51||4.02|
|HDFC Equity||21,754||Prashant Jain||33.83||8.14||8.23|
|Aditya Birla SL FrontLine||21,380||Mahesh Patil||-||1.50||11.44|
|Kotak Standard Multicap||21,271||Harsha Upadhyaya||1.86||4.32||3.26|
|HDFC Mid-Cap Opportunities||21,149||Chirag Setalvad||-||0.99||3.39|
|SBI Bluechip||20,284||Sohini Andani||1.06||1.04||0.14|
|ICICI Pru BlueChip||18,747||Sankaran Naren / Rajat Chandak||-||1.75||0.52|
|AXIS Long Term Equity||18,262||Jinesh Gopani||0.11||0.62||9.31|
|ICICI Pru Value Discovery||16,659||Mrinal Singh||-||2.00||0.17|
|HDFC Top 100||15,261||Prashant Jain||16.93||1.72||1.41|
|Aditya Birla SL Equity Hybrid '95||14,841||Mahesh Patil / Pranay Sinha / Dhaval Shah||0.53||0.06||6.02|
|Reliance Equity Hybrid||14,203||Sanjay Parekh / Amit Tripathi||0.75||0.89||0.54|
|Motilal Multicap 35||13,861||Gautam Sinha Roy / Siddharth Bothra||0.40||0.36||414.55|
|SBI ETF Sensex||12,379||Raviprakash Sharma||-||0.01||-|
|Franklin India Equity||11,832||Anand Radhakrishnan / R Jankiraman||0.34||0.61||1.46|
|ICICI Pru Multi Asset||11,284||Sankaran Naren / Ihab Dalwai / Anuj Tagra||31.65||3.39||32.71|
|L&T Hybrid Equity||10,936||S. N. Lahiri / Karan Desai / Shriram Ramanathan||0.33||0.54||0.06|
|Reliance Large Cap||10,898||Ashwani Kumar / Shailesh Raj Bhan||0.26||3.55||0.11|
|Reliance Tax Saver||10,083||Ashwani Kumar||0.04||0.08||0.03|
|Aditya Birla SL Equity||9,749||A. Shah||0.07||0.44||3.64|
|Reliance Multi Cap||9,732||Shailesh Raj Bhan||0.28||3.04||-|
|UTI Nifty Exchange Traded||9,024||Kausik Basu||-||-||-|
|Mirae Asset India Equity||8,531||Neelesh Surana / Harshad Borawake||2.67||0.10||0.21|
|UTI Equity||8,521||Ajay Tyagi||-||0.30||-|
|L&T India Value||8,160||Venugopal Manghat / Abhijeet Dakshikar||0.39||0.32||0.81|
|Franklin India Bluechip||8,108||Anand Radhakrishnan / Roshi Jain / Srikesh Nair||0.59||1.24||0.54|
|Franklin India Focused Equity||7,733||Roshi Jain / Anand Radhakrishnan||2.63||0.38||2.15|
|HDFC Equity Savings||7,499||Vinay Kulkarni / Krishan Daga / A0 Bamboli||-||0.72||0.45|
|Franklin India Smaller Companies||7,295||R. Janakiraman / Hari Shyamsunder/ Shrikesh Nair||0.25||0.91||0.05|
|DSP BR Equity & Bond||7,188||Atul Bhole / Vikram Chopra||0.35||25.26||191.62|
|Reliance Small Cap||7,019||Samir Rachh / Dhrumil Shah||0.02||3.18||0.10|
|HDFC Taxsaver||6,991||Vinay Kulkarni||-||0.12||0.18|
|Reliance Growth||6,830||Manish Gunwani||1.09||0.58||-|
|Franklin India Prima||6,617||R. Janakiraman / Hari Shyamsunder/ Shrikesh Nair||0.72||1.08||0.13|
|Aditya Birla SL Tax Relief 96||6,569||Ajay Garg||0.03||-||0.04|
|UTI Hybrid Equity||6,513||V Srivatsa / Su0 Patil||0.02||0.17||0.06|
|SBI Magnum Taxgain Scheme||6,428||Raviprakash Sharma||-||0.01||0.05|
|Aditya Birla SL Equity Advantage||6,342||Satyabrata Mohanty||2.39||0.97||4.15|
|Sundaram Mid Cap||6,138||Krishnakumar S||1.15||0.54||3.79|
|SBI Magnum Multicap||5,850||Anup Upadhyay||-||3.11||1.18|
|DSP BR Equity Opportunities||5,765||Rohit Singhania / Jay Kothari||0.16||13.00||48.69|
|Mirae Asset Emerging Bluechip||5,730||Neelesh Surana||4.40||0.53||0.89|
|IDFC Multi Cap||5,678||Anoop Bhaskar||0.09||0.75||0.44|
|DSP BR Midcap||5,676||Vinit Sambre / Resham Jain / Jay Kothari||0.10||12.23||58.70|
|UTI Mastershare||5,531||Swati Kulkarni / Sharwan Kumar||0.34||0.23||-|
Source: Outlook Asia Capital(Manoj Nagpal is Consulting Editor with Moneycontrol.)