MFs apply brakes on pace of equity folio closures

Sector witnesses lowest decline in equity accounts since December, 2011

First time in 19 months, India's fund houses saw equity account closures decisively below a lakh mark. This confirms the fact that retail investors, accessing stock markets through mutual funds, largely remained invested in August.

The month saw equity account closures of a little less than 63,000 - lowest since December, 2011, according to the latest statistics available from the Securities and Exchange Board of India (Sebi).

Though the figures are still high but in comparison to monthly closures of 2-7 lakh, which were quite persistent till a few months ago, this certainly brings cheer for the fund houses.

The industry, which lost close to a crore equity folios since 2009, currently has 3.16 crore accounts.

Sector's top executives had told Business Standard that amid a sharp volatile stock market, there were less redemption requests. Though sales too remained poor but low redemptions helped the industry have positive inflows of Rs 458 crore in the equity segment.

As on 31 August, assets under management (AUM) of equity schemes (including ELSS) stood at Rs 1.57 lakh crore or 21% of sector's overall AUM.

Table : Showing monthly equity closures so far in FY14
Month Decline (Month-on-month)
April	2,64,005
May	6,99,732
June	1,13,550
July	3,56,426
August	62804

Source: Securities and Exchange Board of India (Sebi)