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The folio numbers issued by mutual fund houses declined a marginal 0.47 per cent in September to 4.13 crore from 4.15 crore in August. The trend was despite the assets under management by 44 mutual fund houses increasing 13 per cent in September to Rs 8.66 lakh crore, compared with Rs 7.66 lakh crore in the preceding month.
Maximum decline
According to data released by the capital market regulator SEBI, equity funds saw the maximum decline in folio numbers followed by gold exchange traded funds (ETF) in September. However, balanced and liquid funds gained additional numbers, indicating fresh investments in these schemes. G. Pradeepkumar, Chief Executive Officer, Union KBC, said some of the long-term investors in equity-oriented mutual fund schemes were upset with the erosion in value of their investments and preferred to exit.
“Returns from liquid funds were very attractive in August and September as yields went up substantially after the Reserve Bank of India took measures to tighten liquidity in the banking system,” he added.
Folio numbers of equity funds declined two per cent to 2.43 crore in September due to huge volatility in the market. Gold ETFs, which track international gold price movements, saw 1.13 per cent fall in folios to 5.39 lakh (5.45 lakh in August) as the yellow metal was impacted by huge volatility in the rupee value against the dollar.
Strengthening Rupee
Waqar Naqvi, CEO, Taurus Mutual Fund, said investors took advantage of rupee gaining strength against dollar last month from its record low registered in August, resulting in funds with overseas focus attracting fresh investments. Folios in these schemes grew by 7,551 to 1.75 lakh. From a record low of 68.80 in August, the rupee gained 4.72 per cent against the dollar in September to 62.60.
Aashish P. Somaiyaa, CEO, Motilal Oswal AMC, said investors were also attracted by the positive trend in the global markets with signs of recovery in the US economy.
Interestingly, the gains in folios of balanced and liquid funds point to the fact that these investors have churned their investments, but chose to stay put with mutual funds, he added.
Balanced funds, which invest in both equity and debt, registered the maximum gain of nine per cent to 27.43 lakh. Liquid funds grew 5.22 per cent to 2.43 lakh.
>suresh.iyengar@thehindu.co.in
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