Equity Funds Continue To Draw Retail Investors: CRISIL

MUMBAI: Volatility in the Indian stock markets has not deterred retail investors from pouring money in equity-oriented funds, CRISIL research said in a report. Retail folios in equity schemes rose 13.1% to 3.49 crore in FY16 and contributed 77% of the total retail folios, despite the market as represented by Nifty 50, closing the fiscal year down nearly 9%.

“The latest quarter saw addition of 12.57 lakh accounts – the highest since December 2014,” the report stated. “Retail folios in the segment marked the sixth consecutive quarter of gains.”

Among other categories, balanced funds, with higher orientation towards equity, too continued to benefit from the penchant for equity investments. The category added 4.33 lakh folios in FY16 to push the total count to 23.38 lakh.

Even high net-worth individuals preferred to invest mostly in equity, debt and balanced funds. Folios held by HNIs crossed the 18 lakh mark at the end of FY16.

On the other hand corporates continued to lead in the AUM share. “Corporates continued to dominate mutual fund assets under management with 47% share in the March quarter against 48% in the December quarter,” Crisil said in its report. “HNIs were the second biggest contributor with 29% share. The retail segment’s share was steady at 22%.”

The total mutual fund folios clocked a record high of 4.77 crore closing the year with a 14% growth. Mutual funds added over 59 lakh folios in FY16 alone and nearly 18.10 lakh folios in the March quarter, taking the tally to an all-time high.

Crisil said retail customers were the key driver behind the growth in folios. ““The industry upsurge was led by retail folios, which increased to 4.54 crore in FY16,” the report added. “They continued to account for 95% of the total folio base.”