Despite volatile equity markets, retail investors have continued to invest in equity as well as debt mutual funds. For the quarter ended March 2015, mutual fund posted 3.42% increase in retail folios following a 1.69% rise in the previous quarter. Crisil in its report states that retail folios increased by 13.22 lakh to 3.99 crore the highest in two years. Retail folios continued to account for 96% of the total folio base of 4.17 crore folios.
Also, 58.46% of retail AUM stayed in equity mutual funds for more than two years, for quarter ending March 2015 marginally lower than 59.92% in the preceding quarter. Industry experts say strong performance of equity funds have prompted investors to stay invested for the long term.
The report also says, “Of the R2.04 lakh crore of retail investments in equity-oriented mutual funds, R1.19 lakh crore was held for over 24 months. About 26.22% of high net worth individuals (HNIs), by AUM, stayed invested in equity mutual funds for more than two years, lower than 28.45% in the previous quarter.”
SN Baheti, MD and CEO at IDBI AMC says, “Equity markets have been volatile in the past few weeks. But going by the numbers I don’t think investors are worried about short-term fluctuations. I think this is very positive sign for the mutual fund industry.” The equity category reported 11.82 lakh additions to 3.08 crore folios for quarter ended March 2015, higher than 6.03 lakh additions in the preceding quarter.
Debt funds and in particular, gilt funds continued to attract retail and HNI attention over the past few months. “Debt fund folios continued to rise, ending at 68.35 lakh in March 2015 compared with 67.52 lakh at the end of the previous quarter. Within debt funds, retail folios rose to a record high of 61 lakh folios. The category saw addition of 70,491 retail folios in the March quarter compared with 16,375 folio closures in the previous quarter,” said the Crisil report.