April 14, 2023
admin
MF staff likely to get 20-40% bonuses
Asset management companies (AMCs) are likely to pay 20-40% of their annual salaries as bonuses to their employees this year, in line with the previous year, industry officials said.
Bonuses will vary from firm to firm, with the larger asset managers likely to be more generous in their payouts.
“Net-net, average bonuses could range from 30-40% of a fixed salary and 75-80% of last year,” said G Pradeepkumar, chief executive of Union AMC. “The investment teams, especially the top performers, may still be getting a fairly decent bonus. But for sales and other support functions, the bonuses could be more modest.”
Bonuses for sales and business development teams are typically proportionate to growth in assets and investor folios. Fund managers’ compensation, on the other hand, will largely be linked to schemes’ performance.
The majority of the Indian large-cap equity funds failed to beat the benchmark in 2022, with 88% of actively managed funds underperforming the BSE 100, according to the S&P Indices Versus Active Funds India Scorecard. In the same period, 55% of managers of mid and small-cap funds underperformed the S&P BSE 400 MidSmallCap Index.
The industry managed to grow its asset base in FY23 despite the wobble in the stock market and regulatory constraints. The year saw Rs 1.46 trillion in equity flows, even as the benchmark Nifty 50 slid 0.6%. Average monthly SIP contribution for FY23 rose 16% year on year to Rs 14,276 crore. SIP AUM in FY23 registered a growth of 18.5% to Rs 6.83 trillion, according to the Association of Mutual Funds in India.
New fund offerings were buoyant in FY23 as well, despite the regulatory diktat in the first three months of the year, barring fund houses from floating new schemes until the industry complied with its norms concerning the pooling of investors’ funds by intermediaries and distributors. Flows into international schemes, however, were marred owing to the regulator’s reluctance to raise investment limits.
Certain categories of debt funds saw a surge in flows towards the year’s end as investors rushed to lock in tax benefits for three-plus-year timeframes. Corporate bond funds, PSU debt funds and gilt funds added a cumulative Rs 26,552 crore in March.
“The flows have been good and the industry will be steady on renumeration this year. Increments can be in double digits for the top fund houses. The hiring, however, is likely to be muted given the expansion and considerable churn seen last year,” said a senior fund official.
He added that the outlook for the coming year is challenging. “Flows in the past two years have predominantly been in the mid and small-cap funds and the patience of investors is likely to be tested. We need to see how that plays out. With the tax benefit out of the way, dent funds will become a hardsell,” he said.
>>Study Mainboard IPOs: Click
>>Get Good Staff or Job, Click: Staffavailable.com
>>Interested in Used Automobiles or vintage cars? Click: BigGaddi.com
>>NFO at a Glance, Click
>>Study Stock Research Reports, Click: AnalysisLibrary.com
>>Interested in Crossword Puzzles? Click: Magajmari.com