Number of mutual fund accounts declines in 2012-13

Loses more than 32 lakh investors, equity schemes biggest losers in terms of folios

The mutual fund industry seems to have lost more than 32 lakh investors, measured in terms of individual accounts or folios, in the first 10 months of the current fiscal, with equity funds accounting for most of the losses.

"The number of folios have fallen to 4.32 crore at the end of January from 4.64 crore in the previous fiscal (2011-12), translating into a decline of 32.45 lakh new investor accounts," as per the latest data of market regulator Sebi about total investor accounts with the country's 44 fund houses.

Folios are numbers designated to individual investor accounts, although one investor can have multiple folios.

Equity schemes were the biggest losers in terms of folios, losing 40.2 lakh new investor accounts. The total number of folios in equity funds plunged to 3.36 crore at the end of January 2013 from 3.76 crore in the previous fiscal.

Equity folios account for over 70% of the industry's total new investor accounts.

Mutual fund industry has been facing consistent equity folio closures in the past few months. Besides, equity schemes have seen outflows for the last eight months, with January witnessing an outflow of Rs 2,501 crore.

The benchmark BSE Sensex has gained over 14% in the current fiscal so far (April-January, 2012-13). According to market participants, investors have used market rally as an opportunity to exit after booking profits.

"The sharp fall in the number of folios can be attributed to profit booking and various merger schemes in the mutual fund industry among others," Quantum Asset Management Company CEO Jimmy Patel said.

Balanced schemes, which invest in equity and debt category, followed closely and shed 1.11 lakh folios to end at 26.07 lakh in January.

Fund of funds lost 34,000 folios to end January at 1.77 lakh.

In contrast, income or debt oriented schemes, gained 8.11 lakh folios and now have 60.61 lakh folios.

Besides, exchange traded funds have 7.32 lakh investor accounts at the end of January after gaining 1.09 lakh folios.