Retail investors return as equity market sags

Even as equity markets are in the firm grip of a bearish sentiment, retail investors appear to be opting to invest in increased numbers, presumably in anticipation of returns when the scenario improves.

The number of retail folios in equity schemes rose by 138,000 in August, a month when the benchmark indices fell by 12 per cent. “Retail investors are coming back. Not only has the number of investors increased, the quantum of investment is showing a rise,” says Jaideep Bhattacharya, group president and chief marketing officer of UTI Asset Management Company.

This has brought relief to fund players, especially since there was an exodus of investors in July, with 330,000 equity folios being closed.
 

GROWING INVESTORS Folios in different categories
Category	July	August	Change
Income	4,849,552	4,883,418	33,866
Equity	30,394,380	30,532,785	1,38,405
ELSS	8,160,165	8,140,136	(20,029)
Balanced	2,756,954	2,766,586	9,632
ETFs	510,768	525,090	14,304
Fund of funds	222,982	222,047	(935)
Source: Securities and Exchange Board of India   () indicate decline

Nimesh Shah, managing director and chief executive officer of ICICI Prudential MF, says, “At every dip (in the markets), money is flowing in. Retail investors have become smarter. Systematic Investment Plans (SIPs) are on the rise.”

During August, the overall rise in folios of MF schemes were 175,000, of which pure equity schemes contributed 138,000. Net inflows in equity schemes in the month was close to Rs 2,000 crore. According to equity heads, there were no redemptions, which backed fund managers to take buy calls through the month.