7 lakh equity folios close, mainly due to scheme mergers and de-duplication

Scheme mergers, de-duplication of folios to identify unique investors have led to an overall drop of close to five lakh folios in the last three months.

From April to June 2012, the industry has seen a decline of more than seven lakh folios from equity funds, shows the latest SEBI data. There were 3.76 crore equity folios (including ELSS) in March which fell to 3.69 crore folios in June.

Industry officials say that the decline in equity folios is due to scheme mergers and folio de-duplication exercise carried out by R&Ts. The number of equity schemes has dropped from 376 in March 2011 to 351 in June 2012. SEBI had asked fund houses to merge similar schemes in 2010.

“The decline in folios is due to a merger of schemes. If two schemes are getting merged, the common investors get one folio. It is also due to de-duplication of folios across industry. This is being done to identify unique investors. Folios in debt funds have increased because of new FMPs and bond funds launched by AMCs,” says a sales head of a large fund house.

Debt funds have been continuing to attract investors, reflected by 2.29 lakh folios additions during the same period. ETFs added 19372 folios, out of which Gold ETFs alone added 14471 folios while other ETFs added 4901 folios. The number of ETF schemes (Gold ETFs and other ETFs) has gone up to 34 in June 2012 from 28 schemes in March 2011.