6th time in row, MFs lose 16 lakh retail folios in H2 of FY14

The industry had 3.95 crore folios in H2 of FY14 compared to 4.13 crore folios in H1: AMFI

The mutual fund industry has lost around 4 per cent or 16 lakh retail folios during the second half of the past financial year, making it the sixth consecutive half-yearly decline, a Crisil release said.

According to the data released by the Association of Mutual Funds in India (AMFI), the industry had 3.95 crore folios, including institutional and high networth individuals, in H2 of FY14 compared to 4.13 crore folios in H1.

During the second half, equity category saw maximum decline in the number of retail folios as investors booked profit due to steep rise in the segment coupled with expectations of volatility ahead.

Interestingly, HNIs too turned away from equity during this period.

"After rising almost three times in H1 of FY14, the number of folios held by HNIs (individuals investing Rs 5 lakh or more) declined by 5 percent or 1.5 lakh folios in the second half of FY14 as the segment chose to book profit," the rating agency said.

It, however, added the overall decline in the segment was offset by an increase in the number of folios in the debt and money market oriented funds.

In the gold exchange-traded funds (ETFs), the retail folio count fell by nearly 7 per cent to 4.89 lakh during the second half of the last fiscal compared to 5 per cent decline in H1 of FY14.

However, debt funds category continue to see rise in the number of retail folios.

"Debt funds added 2.91 lakh retail folios over the past six months, highest since September 2012," Crisil said.

During this period, retail equity AUM that stayed invested for more than two years, dipped to 62 per cent, lower than 68 per cent seen in the preceding six months.

"Out of the Rs 1.22 lakh crore of retail investment in equity-oriented funds, Rs 75,403 crore of investment were held for over 24 months," the report said.

Giving a segment wise data, the rating agency said while corporates continued to dominate the industry AUM with 49 per cent share in March 2014, HNIs were the second biggest contributors with 29 per cent share followed by retail with 19 per cent share.