'Mutual Funds' posted 3.42% increase in retail folios in the quarter ended March 2015 (Table 2) following a 1.69% rise in the previous quarter. In absolute terms, retail folios increased by 13.22 lakh to 3.99 cr - the highest in two years. Retail folios continued to account for 96% of the total folio base of 4.17 cr folios (Table 1) as of the quarter ended March 2015. The industry saw a rise of 14.63 lakh folios (3.63%) in the latest quarter, led primarily by addition in retail equity fund folios.
Equity mutual funds continue to attract retail investors
Retail investors showed increased penchant to invest in equity mutual funds in their bid to participate in the current uptrend in the underlying equity market. The equity category reported 11.82 lakh additions to 3.08 cr folios, higher than 6.03 lakh additions in the preceding quarter. The equity market benchmark CNX Nifty gained 2.5% in the quarter.
HNI segment reports 8.21% rise in folios
The high net worth individuals or HNI (individuals investing Rs 5 lakh or more) segment saw a rise of 8.21% or 1.09 lakh folios to 14.31 lakh folios (Table 3) compared with rise of 0.99 lakh folios in the preceding quarter. The rise in total HNI folios was led by the equity category (46% of total HNI folio base), which reported an addition of 0.85 lakh folios to 6.61 lakh folios. Debt fund folios continue to rise 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.
Gilt funds continue to attract retail and HNI attention
The retail and HNI segment added 6,030 (consolidated) folios in the latest quarter following 6,781 folio additions in the previous quarter as the category benefitted from increasing hopes of a rate cut by the Reserve Bank of India (RBI). The apex bank lowered the repo rate twice by 25 bps each to 7.50% during the quarter. Gilt funds’ total folio base was 65,225 folios in March 2015.
Gold ETFs lose sheen
Gold exchange traded funds (ETFs) posted 4.46% decline or 21,742 folio closure to end at 4.66 lakh folios. The retail segment saw closure of 20,265 folios in the latest quarter as investors shied away from the category due to subdued performance by the underlying asset. Domestic gold prices (represented by the CRISIL Gold index) fell over 3% in the quarter ended March 2015.
Retail equity AUM invested for over two years at 58.46%
Tenure-wise analysis of assets under management (AUM) across investor types and categories showed that 58.46% of retail AUM stayed in equity mutual funds for more than two years, marginally lower than 59.92% in the preceding quarter. Of the Rs 2.04 lakh cr of retail investments in equity-oriented mutual funds, Rs 1.19 lakh cr was held for over 24 months. About 26.22% of HNIs, by AUM, stayed invested in equity mutual funds for more than two years, lower than 28.45% in the previous quarter.
Corporates continue to dominate mutual fund AUM
Corporates continued to dominate mutual fund AUM with 46% share in March 2015 (Table 4), down from 47% in December 2014. HNIs were the second biggest contributor with 29% share. The retail segment’s share in total mutual fund AUM rose to 23% in the latest quarter from 22% in the preceding quarter.
ANNEXURE
Table 1 – Investor-wise composition of number of folios (in lakh)
| Investor Classification | Mar-15 | Dec-14 | Absolute Change | % Change |
| Retail | 399.43 | 386.21 | 13.22 | 3.42 |
| HNI * | 14.31 | 13.22 | 1.09 | 8.21 |
| Corporates | 3.64 | 3.31 | 0.33 | 10.09 |
| Others | 0.03 | 0.03 | -0.01 | -17.75 |
| Total | 417.4 | 402.77 | 14.63 | 3.63 |
Table 2 – Composition of retail folios (in lakh)
| Investor Classification | Mar-15 | Dec-14 | Absolute Change | % Change |
| Equity Oriented | 308.29 | 296.47 | 11.82 | 3.99 |
| Debt Oriented | 61.05 | 60.34 | 0.7 | 1.17 |
| Balanced | 19.04 | 18.2 | 0.84 | 4.62 |
| Gold ETF | 4.55 | 4.75 | -0.2 | -4.26 |
| Liquid/Money Market | 2.37 | 2.37 | 0 | -0.01 |
| ETFs (other than Gold) | 2.24 | 2.15 | 0.09 | 4.09 |
| Fund of Funds investing Overseas | 1.36 | 1.44 | -0.08 | -5.46 |
| Gilt | 0.52 | 0.48 | 0.04 | 8.86 |
| Total | 399.43 | 386.21 | 13.22 | 3.42 |
Table 3 – Composition of HNI folios (in lakh)
| Investor Classification | Mar-15 | Dec-14 | Absolute Change | % Change |
| Equity Oriented | 6.61 | 5.76 | 0.85 | 14.69 |
| Debt Oriented | 6.22 | 6.1 | 0.12 | 1.97 |
| Balanced | 0.69 | 0.56 | 0.13 | 22.37 |
| Liquid/Money Market | 0.5 | 0.51 | 0 | -0.86 |
| Fund of Funds investing Overseas | 0.09 | 0.1 | -0.01 | -12.12 |
| Gold ETF | 0.07 | 0.08 | -0.01 | -12.78 |
| Gilt | 0.09 | 0.07 | 0.02 | 24.7 |
| ETFs (other than Gold) | 0.04 | 0.04 | 0 | 4.97 |
| Total | 14.31 | 13.22 | 1.09 | 8.21 |
Table 4 – Investor-wise composition of AUM (in cr)
| Investor Classification | Mar-15 | Dec-14 | Change % | % of total AUM | % of total AUM |
| (Mar-15) | (Dec-14) | ||||
| Corporates | 497,482 | 491,669 | 1.18 | 46 | 47 |
| HNI * | 309,661 | 293,119 | 5.64 | 29 | 28 |
| Retail | 248,065 | 232,222 | 6.82 | 23 | 22 |
| Others | 27,549 | 34,333 | -19.76 | 3 | 3 |
| Total | 1,082,757 | 1,051,343 | 2.99 | 100 | 100 |
* Defined as individuals investing Rs 5 lakh and above, * Others include banks/FIs and FIIs, * Numbers rounded off to two decimals
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