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Mutual funds have lost an estimated over 20 lakh investors, measured in terms of individual accounts or folios, in the first seven months of the current fiscal, mainly due to profit-booking and various merger schemes.
According to SEBI data on total investor accounts with 44 fund houses, the number of folios fell to around 4.07 crore at the end of October 2013 from 4.28 crore in the last fiscal (2012-13) — indicating a decline of 20.72 lakh.
Folios are numbers designated to individual investor accounts, although one investor can have multiple folios.
Market participants attributed the sharp fall in the number of folios to profit-booking and various merger schemes in the mutual fund industry, among other reasons.
Decline in equity folios
During April-October, the number of investor folios in equity schemes fell over 25 lakh. The total number of folios were 3.06 crore at the end of October against 3.32 crore at March-end.
The mutual fund industry has been facing consistent equity folio closures for the past few months. Earlier, SEBI Chairman, U.K. Sinha, had also raised concerns over the continuous decline in folios in recent months.
The decline in equity folios during the first seven months of the current fiscal is coincided with BSE’s barometer index Sensex surging 1,785 points or 9.2 per cent in October.
Debt fund folios
According to SEBI data, the total number of folios in debt funds rose about 4.22 lakh to 66 lakh at the end of October. Besides, exchange traded funds lost 48,755 folios to nearly seven lakh.
Balanced schemes, which invest in equity and debt category, gained 1.06 lakh folios to 27 lakh.
As on October 31, 2013, the sector offered 1,335 schemes to investors, of which 344 were equity schemes and 891 were debt-linked schemes.
The mutual fund industry lost more than 36 lakh investor accounts in 2012-13. The last financial year also marked the fourth consecutive year of loss of folios by mutual funds.
During the preceding three financial years, the mutual fund industry had lost over 15 lakh investor accounts.
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