Equity MFs see record rise in retail investor accounts

Continuing the uptrend for the fourth consecutive quarter, retail equity mutual fund (MF) folios or investor accounts rose by a record 11.5 lakh to 3.28 crore in the second quarter of 2015-16 (July-September). The sharp increase has resulted in retail equity MF folio count jumping by nearly 20 lakh in the first half of 2015-16.
About 8.17 lakh equity MF folios were added in the preceding quarter.Investors remained buoyant on equity funds despite the volatility in the stock markets. Net inflows (higher purchase than sales) into equity schemes came at $3 billion, or Rs 19,614 crore, in July-September as investors lapped up more MF units in a falling market.
Retail MF folios rose by 15.11 lakh on an overall basis to 4.24 crore, data with the Association of Mutual Funds in India (AMFI) showed. Even on a half-yearly basis, the rise in retail folios during April-September is a record.

The retail segment's share in total mutual fund AUM (assets under management) rose to 22% in July-September from 21% in the preceding quarter. Overall, folios rose by 16.66 lakh or 3.9% during the quarter. High net worth individuals (HNI), defined as individuals investing Rs 5 lakh or more, folios increased by 1.13 lakh to a record 16.33 lakh led by both equity (up 0.77 lakh folios) and debt (up 0.20 lakh folios) in July-September, AMFI data showed.Debt fund folios, which account for 16% of the total fund folio count, registered the biggest quarterly rise (2.71 lakh increase) since December 2014 to 71.36 lakh folios at the end of September 2015. Within debt funds, retail folios registered an increase of 2.47 lakh compared with 32578 retail folios added in the previous quarter. Industry body AMFI started disclosing data on a quarterly basis instead of half-yearly from December 2014.
Tenure-wise analysis of AUM across investor types and categories showed that 56.38% of retail AUM stayed in equity MFs for more than two years. This was slightly lower than the preceding quarter. Of the Rs 2.12 lakh crore retail investments in equity-oriented MFs, Rs 1.2 lakh crore was held for over 24 months.
About 22% of HNIs stayed invested in equity MFs for more than two years. This was, however, lower than the previous quarter. Corporates continued to dominate MF AUM with 47% share in July-September, the same as the previous quarter. The HNI segment was the second biggest contributor with 29% share.
Folio closures continued for the third consecutive quarter in gold exchange traded funds; 8,739 folios were closed in second quarter compared to 4,467 folios in the previous quarter. Gilt funds, in which 585 consolidated folios were closed in the retail and HNI segments last quarter, rebounded with the addition of 3,050 consolidated folios on hopes of a rate cut by the RBI.