The mutual fund industry lost close to 30 lakh folios during April 2013 till February 2014, shows the latest SEBI data.
A majority of this decline was due to rapid fall in equity folios. Equity funds lost more than 36 lakh folios during the same period due to redemptions and folio consolidations. Equity folio counts dropped from 3.31 crore in March 2013 to 2.95 crore in February 2014. Equity funds account for 74% of industry’s total 3.98 crore folios.
With equity markets scaling new high, investors are looking for every opportunity to cash out of equity funds. This is evident by Rs. 7333 crore net outflows from April-February 2014. The industry clocked sales of Rs. 39,417 crore during the same period while investors redeemed Rs. 46,751 crore which resulted in a net outflow of Rs. 7,333 crore.
While the industry is reeling under unabated redemptions, new equity fund launches brought some relief for the industry. Fund houses launched 17 equity funds (open-end and close-end) during April-February 2014 which mopped up Rs. 1,995 crore. Majority of these were close-end funds.
Debt
With interest rates remaining at peak, debt funds continued to attract investors. More than six lakh folios were added in debt funds category. Investors poured in Rs. 1.73 lakh crore in debt funds during April-February 2014. Inflows in debt funds helped the industry’s assets under management reach new high at Rs. 9.02 lakh crore in February 2014 from Rs. 7.94 lakh crore in March 2013.
ETFs
Exchange traded funds which comprise of Gold ETFs and Other ETFs tracking equity indices lost 66590
Folios. Majority of folio erosion was seen in the Gold ETFs which saw net outflows of Rs. 2145 crore. ETFs currently manage AUM of Rs. 10,585 crore.
Apart from the above categories, fund of funds which invest overseas and balanced funds saw growth in number of folios.
The industry has launched five overseas fund of funds during April-February 2014 which mopped up Rs. 413 crore. The AUM in this category has grown from Rs. 2064 crore in March 2013 to Rs. 2955 crore in February 2014 due to new fund launches and inflows in existing schemes.