Retail Mutual Fund Folios Cross 4 Crore Mark..!

It's a good time to be in the Indian mutual fund  (MF) industry. Retail mutual fund folios have increased for the 3rd consecutive quarter to cross the 4 crore mark for the first time in over 2 years.

Retail folios rose 2.36% in the latest quarter, following 3.42% and 1.69% rise in the preceding 2 quarters, respectively.

In absolute terms, retail folios increased by 9.43 lakh to 4.09 crore, led by the equity MF category. Overall, the industry saw a rise of 10.38 lakh folios (2.49%) in the latest quarter, according to data compiled by CRISIL.

The rise in investor accounts or folios is happening at a time when capital markets have been steady and have given positive returns.

Retail equity fund folios have been on a steady uptrend since March 2014 as investors have been pumping money in the category, citing uptrend in the underlying equity market.

Nearly 8.17 lakh equity folios were added in the June (2015) quarter, taking the current total to 3.16 crore; 11.82 lakh accounts were added in the preceding quarter.

Even the smart money is getting to mutual funds at a good pace. The high net worth individuals or / HNI (individuals investing Rs. 5 lakh or more) segment saw a rise of 6.22% or 0.89 lakh folios to 15.20 lakh folios. This compares with a rise of 1.09 lakh folios in the preceding quarter. The rise was led by the equity category (48% of the total HNI folio base), which reported an addition of 0.70 lakh folios.

The main stay of the Rs 12 lakh crore asset strong Indian mutual fund industry is debt schemes. And investors have been thronging such schemes as well. Debt fund folios (16% of the total fund folio count) increased for the second successive quarter to 68.65 lakh in June 2015 from 68.35 lakh in March 2015.

Within debt funds, retail folios scaled a new high of 61.38 lakh folios. The category saw an addition of 32,578 retail folios in the June quarter compared with 70,491 retail folios in the previous quarter.

There have been some casualties. While equity culture has gained, gilt funds have lost sheen. Gilts funds saw closures of 585 (consolidated) folios in the retail & HNI segments in the latest quarter following an addition of 6,030 and 6,781 folios in the preceding quarters, respectively.



Gold ETFs continued to lose lustre. Gold exchange traded funds (ETFs) posted nearly 1% decline or 4,467 folio closure to end at 4.61 lakh folios following 21,742 folio closure in the previous quarter. The retail segment saw closure of 4,236 folios in the latest quarter as investors shunned the category due to subdued performance by the underlying asset.

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