MF investor accounts dip by over 34 lakh

NEW DELHI: The mutual fund industry lost more than 34 lakh investors, measured in terms of individual accounts or folios, in the first 11 months of fiscal 2012-13.

"The number of folios, have fallen to 4.30 crore at the end of February from 4.64 crore in the previous fiscal (2011-12), translating into a decline of 34.34 lakh new investor accounts," according to the latest Sebi data about total investor accounts with the country's 44 fund houses.

Folios are numbers designated to individual investor accounts, although one investor can have multiple folios.

The number of investor folios for equity schemes fell by 42.5 lakh, while the debt funds recorded an increase of over eight lakh in the number of their new investor accounts.

The total number of folios in equity funds plunged to 3.34 crore at the end of February 2013 from 3.76 crore in the previous financial year.

Equity folios form over 70 per cent of the industry's total new investor accounts.

The benchmark BSE Sensex has gained over eight per cent in the past financial year so and market participants believed that investors have used market rally as an opportunity to exit after booking profits.

"The sharp fall in the number of folios can be attributed to profit booking and various merger scheme in the mutual fund industry among others," Quantum Asset Management Company CEO Jimmy Patel said.

The mutual fund industry has been facing consistent equity folio closures in the past few months. Besides, equity schemes have seen outflows for the last eight months. The industry has offloaded shares worth over Rs 21,000 crore during the first 11 months of fiscal 2012-13.

On the contrary, Mutual Funds (MFs) seem to have a bullish stance on the debt market and invested 4.05 lakh crore in the debt market during the same period.

The total number of folios in debt funds rose by 8.56 lakh to 61.05 lakh during the month of February. Besides, Exchange traded funds gained 1.09 lakh folios to 7.33 lakh investor accounts at the end of February.

Balanced schemes, which invest in equity and debt category, followed closely and shed 1.13 lakh folios to end at 26.05 lakh in February.