PremiumMUMBAI: A survey of mutual fund distributors, conducted by Cafe Mutual, showed that a majority of distributors (55.40%) will not recommend passive funds. The survey of 361 mutual fund distributors, conducted in June, also showed that Balanced Advantage Funds (BAFs) have become the most popular mutual fund category among clients of distributors followed by international funds and equity ETFs.
Passive funds are low-cost products with relatively low commissions for mutual fund distributors. However, they have become increasingly popular over the past 1-2 years with a huge surge in assets under management. Mutual fund houses have also been launching them in greater numbers with Sachin Bansal’s Navi Mutual Fund launching a Nifty Index Fund at an expense ratio of just 0.06% from 3 July.
Within equity funds, most respondents plumped for flexi cap category (43%) followed by mid and small cap funds (28%) and large cap funds (21%). Among debt funds, short duration funds were most in demand among investors, followed by corporate bond funds and banking and PSU debt funds. About 48% of distributors reported adding fresh clients in the pandemic and 49.5% said their business grew during the pandemic. According to respondents, phone calls have been the most effective way of engaging with clients during the lockdown, followed by social media.
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