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Mutual fund investor tally hits six-year high

HT Business:  July 29, 2016

Mumbai: The total number of retail investors subscribing to mutual funds in India has reached a six-year high, according to latest data from the industry. This highlights the importance of equities as an investment option for most investors.

While mutual fund houses added 12.61 lakh folios in the April-June quarter, which is up 2.65% over January-March, the pace of addition has declined, statistics from the Association of Mutual Funds of India and Crisil have shown. The total number of folios now stands at 4.89 crore.

Though retail folios constitute 95% of total mutual fund folios and grew for the seventh consecutive quarter, the addition of 11.42 lakh folios was lower, compared to the preceding quarter. The total number of retail folios stood at 4.65 crore at the end of June, with equity-oriented funds continuing to find favour.

Equity-oriented funds added 5.81 lakh folios to reach 3.54 crore in April-June, less than half of the 12.57 lakh folios that were added in the previous quarter, said ratings firm Crisil, which also comes out with a periodic report on mutual funds.

The drop in folios can also be seen from the fact that investors pulled out Rs 58,185 crore and Rs 21,535 crore in May and June respectively from across mutual funds (including equity, debt, income, exchange traded funds).

Fund managers say people who typically invest lump sum amounts may have booked profits amid the market rally. “Some investors would have taken advantage of the rally in equity markets and withdrawn. However, SIP (systematic investment plan) flows have remained strong,” said Jimmy Patel, CEO, Quantum Asset Management.

Total SIP accounts crossed the 1 crore mark in April and the average monthly SIP flows have also risen to about Rs 3,000-3,500 compared with Rs 2,500 a year ago, according to market experts.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.