With equity markets remaining volatile, mutual funds (MFs) - TopicsExpress

With equity markets remaining volatile, mutual funds (MFs) continue to lose investors. Equity-oriented MFs have lost 34.2 lakh folios or investor accounts in April-September, data with the Association of Mutual Funds in India (Amfi) showed. Equity funds had 2.92 crore folios at the end of September, the lowest since Amfi started releasing break-up on folios from March 2009. In all, MFs have lost 34.7 lakh retail folios or 8% of total retail folios in April-September to 3.79 crore folios, Amfi data showed. This was the sixth consecutive half-yearly decline in retail folios as per Amfis disclosure. The gain in folios in the high net worth individuals (HNIs) category capped the fall in investor accounts to 15 lakh folios. The industry currently has 4.13 crore folios, a 3.5% decline. The sharp decline in retail folios was mainly in the equity category, which has been impacted by the ongoing volatility in the segment, an analyst at ratings agency Crisil said. The benchmark Nifty has advanced by a measly 1% in the last six months and declined nearly 3% in January-September. The economic slowdown and mixed cues from the global market led to the decline. Balanced funds, an equity-oriented hybrid category, too saw a decline of over two lakh retail folios over the past six months. Gold exchange-traded funds (ETFs) witnessed a fall in retail folios for the first time. Retail folio count in the category declined about 5% to 5.24 lakh folios for the period compared to a 16% rise in the preceding six months. Investors exited the category due to volatility in the underlying asset class as domestic gold prices (represented by the CRISIL Gold index) fell by over 2% in the calendar year till September, an analyst said. Debt funds, however, bucked the trend and continued to attract retail investors. The category has seen an uninterrupted rise in retail folios since March 2009. Debt funds added 1.79 lakh folios in the past six months. They added to 1.69 lakh folios in the preceding six months. Unlike retail investors, HNIs reposed faith in markets. Folios held by HNIs, defined as individuals investing Rs 5 lakh or more, jumped three times in April-September on the back of a sharp rise in equity folios. Of the 30 lakh HNI folios, 21 lakh were added in the latest half-year period. While the equity segment saw an addition of over 14 lakh HNI folios, balanced funds and debt-oriented funds added 3.45 lakh and 2.72 lakh folios respectively in April-September. In AUM (assets under management), HNI portfolio in equity-oriented funds increased by 30%, balanced funds by around 14% and by 8% in debt-oriented funds. Falling fortunes Equity funds had 2.92 crore folios at the end of September, the lowest since March 2009 In all, MFs have lost 34.7 lakh retail folios or 8% of total retail folios in April-September to 3.79 crore folios Gold exchange-traded funds (ETFs) witnessed a fall in retail folios for the first time in April-September this year