Financial Year 2014-15: Equity MFs 30 Lakh Investor Accounts Added..!

A stellar rally in stock markets and robust returns of schemes helped investors gravitate towards equity mutual funds with addition of as many as about 30 lakh investor accounts for such products in financial year 2014-15.

Mid cap & small cap, infrastructure funds & multi-cap funds ruled the roost with 50% to 70% gains in net asset values in the one year period ended March 31, 2015.

This helped the industry garner over Rs. 70,000 crore in equity mutual funds, pushing average assets under management (AAUM) of equity mutual funds (including tax-saving schemes) to stratospheric levels of about Rs. 3.5 lakh crore.

Between March 2014 & March 2015, equity folios rose from 2.86 crore levels to nearly 3.17 crore, shows data collated by Cafemutual.Folios are numbers designated to individual investor accounts, though one investor can have multiple folios.

It was a welcome year for the equity MF segment. Prior to that, the equity mutual fund (MF) sector had seen a continuous closure of folios since March 2009 after the market crashed in late 2008 due to the global financial crisis.

Since March 2009, the sector has seen a closure of 1.5 crore folios.The investor base reached its peak of 4.11 crore in March 2009, while it was 3.77 crore in March 2008, according to market regulator Sebi data.

“We remain optimistic about Indian equities in the long run. However, the valuations in the near term look stretched as markets have run up in the recent months. The rally in the past 10-11 months is driven by expectation of reforms and favourable macroeconomic data, including fall in inflation and commodity prices,” said Atul Kumar, head equity funds, Quantum Mutual Fund.

Interestingly, folio count has been increasing especially in the country’s smaller towns — known as beyond-15 cities (B15) with total number of retail folios in such cities recently overtaking the number of folios from T-15 (top 15) cities for the first time.

Debt schemes, more popular among institutions, continued to see solid traction in FY15.

The total folio count in debt funds has increased by 10.34 lakh as experts say even retail investors lapped up some debt products.

Gilt and liquid funds saw addition while investors moved moved away or reduced exposure in some categories. While balanced funds category delivered good returns over one year period, interestingly the folio count in this category dropped by about 5.6 lakh in FY15.

The total folios in balanced funds slipped from 25.5 lakh level in March 2014 to less than 20 lakh level in March 2015. Gold exchange traded funds (ETFs) also saw erosion in folio count. From 4.89 lakh, such folios fell to 4.65 lakh last fiscal.

Poor performance could be a reason with gold ETFs turning out to be the worst performing category and losing about 7% in one year’s time. However, ETFs, which track the equity indices, saw good additions with folio count in this category rising by 39,430 from 1.94 lakh to 2.33 lakh in FY15, according to Cafemutual data.

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