Mutual funds (MFs) lost nearly 5%,or over 21 lakh,retail folios over the past six months ended March 2013,half-yearly folio data released by the Association of Mutual Funds in India (AMFI) show. The decline in retail folios was mainly in the equity category,which was impacted by the volatility in the equity market. The CNX Nifty has declined by 3.8% and 0.4% in the three months and six months period till March 2013.
A tenure-wise analysis of assets under management (AUM) across investor types and categories for the half year-ended March 2013 showed that 63% of the retail AUM stayed in equity mutual funds for over two years,according to a Crisil report.
Similar trend was seen in the data released by Amfi as of September 2012. Of the Rs1.28 lakh crore of retail investment in equity-oriented mutual funds,Rs80,628 crore of investment continued for over 24 months. In the high net-worth individuals (HNIs) category,49% of them stayed invested in equity mutual funds for over two years.
Declining interest rates saw retail investors adding gilt funds to their portfolio with retail folios in this category almost doubling in six months from 27,145 folios to 51,763 folios as of March 2013. HNIs and corporates,too,added folios in this category. HNI folios under gilt category rose from 4,167 folios as of September 2012 to 7,231 as of March 2013,while corporates folios in the category rose from 2,960 folios as of September 2012 to 3,992 folios as of March 2013. The sharp growth in the folios is an outcome of a low base of investors in this category. The RBI lowered its key lending rate,the repo rate,twice in the last three months by 25 bps each to 7.50%.
Corporates continued to dominate mutual fund AUM with a 46% share in March 2013,slightly lower than 47% in September 2012. HNIs with a 28% share were the second biggest AUM contributors followed by retail investors with 23% share.
It must be noted that over 44 lakh equity folios closed in FY13,somewhat reflecting investors eagerness to exit equity investments. The industry lost about 12,200 folios every day in FY13,which is the most in the last nine fiscals. Folio closures have been a regular feature for every single year since FY10.