Are equity MFs losing flavour?

Most smart investors over the years have credited equities over debt instruments, as the reason for their success as investors. But, are equity Mutual Funds (MFs) loosing ground?

According to a report published in Business Standard today, one million equity folio close during January -April. In fact April saw the highest number of equity folio closure, the number stood at 264,000. This is because, a large number of investors choose to book profits since Sensex hit 20,000 mark, and Nifty too crossed 6000 mark.

a large number of investors choose to book profits since Sensex hit 20,000 mark. AFP

The report also said, "Despite a recent bull run in the stock markets, retail investors accessing equities through mutual funds chose to close their accounts and exit investments." However, towards the end of April, there was some positive traction of over Rs 750 crore in several months, amid rising sales. Read full story in Business Standard today.

What you should do: The story also mentioned that risk appetite among retail investors is all time low. We think, it's important that your portfolio has a good amount of diversification, based on your age-based asset allocation and individual risk profile.

And SIP route of investing works well, for regular investors. Don't follow market trends blindly, which means, don't sell simply when everyone is selling and don't buy simply when everyone is buying. Read more about that here.