Mutual funds add 13.2 lakh folios in September; equity funds lead, debt funds hit

Equity fund folio addition has boosted domestic mutual fund industry helping it register over 13.20 lakh more investor accounts in September, SEBI data shows. Total investor accounts stand at 7.78 crore in September.

Equity funds added 10.90 lakh accounts last month, taking the total equity fund folios to 4.81 crore.

Fund managers attributed the addition in equity fund folios to the matured behaviour of retail investors who were seeing the market fall as an opportunity to invest their surplus money.  Folios are numbers designated for individual investor accounts, though one investor can have multiple accounts.

The addition comes even though the AUM of the 41-member-strong MF industry has seen a sharp drop to Rs 22.06 lakh crore in September against record Rs 25.20 lakh crore the month before.

Despite steep fall in equity markets, equity and equity-linked saving schemes (ELSS) saw an infusion of Rs 11,250 crore. Besides, balanced funds witnessed an inflow of Rs 731 crore. About 1.25 lakh folios were added in the ELSS segment.

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Himadri Buch

Assistant Editor|Moneycontrol.com

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The S&P BSE Sensex lost more than 2,400 points, or 6.2 percent in September — the worst fall in the month of September since 2008. The Sensex had fallen by about 10 percent in September 2008.

Trade war woes, rising global crude oil price, which breached $83 per barrel level, rupee falling to nearly 73 against the US dollar, liquidity concerns in NBFCs, a hike in interest rates by US Fed rate, and rising concerns around weak macros are some of the factors which took a toll on markets.

Interestingly, liquid funds that were beaten down the most in terms of outflows and fall in the AUM during September saw an addition in of 53,800 accounts, while debt funds folios fell 13,608 during the review period.

Fears of a liquidity crunch following the IL&FS crisis hit the mutual fund industry in September. Cash plans or liquid funds were the worst hit. Liquid funds registered massive outflows in liquid funds left the mutual fund industry short of Rs 2.3 lakh crore in September.

Going by the data on AMFI, outflows from liquid funds alone totalled Rs 2.11 lakh crore. Liquid funds or money market segment invests in cash assets such as treasury bills, certificates of deposit and commercial paper for a shorter horizon.