Retail and HNIs contribution in MF assets exceeds institutional investors.
Participation of individual investors (HNIs and retails) in mutual fund assets grew by 8% from 43% in 2008-09 to 51% in 2012-13 due to increased preference to debt funds and a strong average holding period, shows a recent report of Celent on ‘Indian Mutual Fund Industry – Navigating Through Tumultuous Waters’. The report shows that individual investor’s share in the total mutual fund assets have grown at 18% CAGR during the same period.
Of the total 51% individual investor’s share in MF assets, retail investors account for 23% in 2012-13 against 21% in 2008-09 while HNIs contribution rose by 6% from to 28% in 2012-13. According to AMFI’s definition, HNIs are those who invest Rs. 5 lakh or above. Also, average holding pattern of retail and HNIs has increased due to abolition of entry load which led to less churning, states the report. Average holding period of retail investors in excess of 2 years grew to 63% while HNIs holding has gone up to 49% during this period.
However, individual investors reduced their exposure to equity funds due to uncertain and volatile market conditions. Share of retail investors in equity funds has come down from 53% in 2008-09 to 43% in 2012-13. Meanwhile, debt products have gained in popularity with 48% contribution of retail investors in 2012-13 compared to 36% in 2008-09.
The report shows that contribution of institutional segment which includes corporates, banks and FII reduced by 8 percent as their participation declined from 57% in 2008-09 to 49% in 2012-13. However, the report claims that this decline is temporary and will recover soon since AMCs focus more on institutional investors to increase their AUM.
The report also says that institutional investors prefer investments in liquid debt or money market funds. Debt funds accounted for 65% of institutional investments, while money market funds account for another 25% in 2012–13. Equity funds share in institutional investments was only 6%, adds report.
|
Institutional Segment |
Investors |
Participation in MF assets in 2008-09 in % |
Participation in MF assets in 2012-13 in % |
Change in % |
|
Corporate |
51 |
46 |
-5 |
|
|
Banks |
5 |
2 |
-3 |
|
|
FII |
1 |
1 |
0 |
|
|
Total |
57 |
49 |
-8 |
|
|
Individual Segment |
Retail |
21 |
23 |
2 |
|
HNIs |
22 |
28 |
6 |
|
|
Total |
43 |
51 |
8 |
Source: Celent
