In the last one year, average folio AUM of retail investors has declined substantially. The latest AMFI data shows that average folio AUM of retail investors fell by 20% to Rs.1.33 lakh in March 2020.
Further, the average folio AUM of retail investors in B30 cities fell to Rs.77,000 from Rs.95,750, a fall of 20% in one year. As of March 2020, average folio AUM of retail investors in T30 cities slipped to Rs.1.73 lakh from Rs.2.12 lakh, a drop of 18% in the last one year.
Experts attribute this to mark-to-market loss and investment through SIPs.
Jimmy Patel, MD & CEO, Quantum says, “The market has been extremely volatile over the last couple of months. In fact, the decline in per folio AUM is in line with market correction. However, the industry might see redemption pressure going forward due to economic distress that could lead to downfall in per folio AUM.”
Seconding his views, George Heber Joseph, CEO & CIO, ITI Mutual Fund said, “Many retail investors prefer investing in mutual funds through SIP and their average ticket size is close to Rs.3000.”
Jaipur MFD Ashish Modani of SLA Financial Solutions points out that growing popularity of direct plans has contributed to this decline. “Many investors who invest in mutual funds through direct plans generally start with small amounts. Also, many first time investors put in a small amount to test the water before investing a larger amount,” he said.
|
Retail investors |
Retail per folio AUM (Rs) March 2020 |
Retail per folio AUM (Rs) March 2019 |
Change (%) |
|
B-30 |
77,000 |
95,750 |
20% |
|
T-30 |
173,000 |
212,000 |
18% |
|
T-30+B-30 |
133,000 |
166,000 |
20% |
|
Overall industry per folio AUM of all investors |
248,000 |
289,000 |
14% |
