News Analysis

Average ticket-sizes of investors in equity, debt funds fall

K Venkatasubramanian BL Research Bureau | Updated on November 26, 2018

Large contribution of the SIP book, with lower average ticket size, may be a reason

Even as assets under management swell, the average ticket sizes of retail investors in equity and debt-oriented categories have decreased in the last one year. The holding sizes in balanced and liquid schemes have, however, expanded.

HNIs (high net-worth individuals — those investing more than ₹5 lakh) have reduced their ticket sizes in equity, gilt, debt and balanced funds while expanding the holding sizes in liquid/money market funds and gold Exchange Traded Funds.

AMFI derives the ticket-size data for a category by dividing the total assets under management in that class by the number of folios or investors.

Apart from the pure arithmetical aspect of newer folios coming in with smaller investments, experts suggest that factors such as preference for the SIP route to investing, interest rate cycles, asset allocation and financialisation of savings have all played a part in fluctuating ticket sizes in different fund categories.

Equity category tapers

After rising steadily over 2013-17, the average ticket size of retail investors in equity-oriented schemes has fallen to ₹72,391 as of September 2018, though the level has more than doubled since September 2013. For HNIs, the decline in the holding size of equity-oriented schemes has been steady over the past three-four years and is at ₹12.4 lakh as of September this year.

Says Deepak Jasani, Head of Retail Research, HDFC Securities: “Almost 10 lakh SIP folios are currently being opened with an average contribution of ₹3,200 every month. About 1.25 crore retail folios were added in 2017-18 with an average ticket size of ₹62,000 versus ₹68,000-75,000 for vintage (or older) investors. The fall in the ticket size is due to the large contribution of the SIP book with lower average ticket size.”


Bhavesh Sanghvi, CEO, Emkay Wealth Management, adds: “First, as the number of investors in equity-oriented funds has gone up, it is quite natural that the ticket sizes have come down. Second, the staggering of investments and increasing percolation of advisory services have also led to better diversification of portfolios.” Balanced schemes have seen rising ticket sizes over the past five years from retail investors as they seek lower risk and better returns.

Says Sanghvi, “Many retail investors look to earn some kind of regular income from their investments and this is where balanced funds have found favour with the investors.”

Jasani elaborates: “Some investors have also invested in balanced funds to earn monthly dividend in a tax efficient manner.”

Gilt funds and gold ETFs

Gilt funds have been shunned by HNIs over the past three years and this category of investors seems to have got the timing right on the fall and the subsequent rise in interest rates.

“Gilts as an investment category within debt allocation is mostly used for making tactical allocation and benefit from fall in interest rates, as against making strategic investments for the long term. So, in that context, investments in this class of funds are made by well-informed and market-savvy investors,” says Sanghvi of Emkay Wealth.

HNIs, however, seem to be taking to gold ETFs of late. Experts think that financialisation of savings has benefited gold ETFs with a part of the demand for gold getting diverted towards ETFs.

Another point to note from the retail and HNI investor standpoint is that the ticket sizes of debt-oriented and even liquid funds are higher than that of equity-oriented schemes.

“Debt and liquid funds will continue to be popular as tax efficient alternatives to other fixed income products. Demonetisation and financialisation of the economy will mean even more investment in debt funds though not necessarily at the cost of equity,” says Jasani.

Published on November 25, 2018

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