'Majority of retail investors stick to equity MF investments'
Notwithstanding volatility in the stock market, over 60 percent of retail investors have stuck to their investments in equity mutual fund schemes for more than two years, rating agency Crisil has said.
Mumbai: Notwithstanding volatility in the stock market, over 60 percent of retail investors have stuck to their investments in equity mutual fund schemes for more than two years, rating agency Crisil has said.
"According to the data released by the Association of Mutual Funds in India (Amfi), over 60 percent of retail investors stayed invested in equity mutual funds for more than two years," Crisil said in a research report released today.
According to the rating agency, their analysis showed that out of Rs 1.4 lakh crore of retail investment in equity- oriented mutual fund, Rs 85,000 crore investment continued for over two years. It, however, said that high net-worth individuals, who invested over Rs 5 lakh, redeemed over 60 percent of their portfolio in less than two years.
The rating firm said mutual funds lost over 16 lakh folios over the past six months ended September, 2012 to end with 4.48 crore folios.
It also said that most of this decline is in retail category, especially in the equity segment, as these were impacted by volatile market sentiments.
According to the data, retail folios fell by 3.67 percent to 4.355 crore by the end of September from 4.52 crore reported in March, 2012.
The report said retail investors increased their presence in debt-oriented mutual funds with a rise in retail folios by 10.5 percent in the past six months.
"This can be attributed to investors looking at relatively safer investment options post the volatility in the domestic equity markets in 2011.
This is also a good sign of penetration of debt mutual funds among retail investors." Referring to overall composition of the industry, it said corporates continued to dominate mutual fund Assets Under Management (AUM) with 46 percent share, which is followed by HNIs with 25 percent and retail investors with 23 percent share.
The situation is even scarier considering the decline comes after a flat capex in 2011-12. Nearly half of the polled have said they have no intention to invest in new projects this year.
Ratings agency Crisil today said there is an uptick in debt securitisation by gold-loan companies in the market, which has stabilised after the initial shocks after the new norms were introduced by the central bank in May.
The weakening credit risk profile of these entities assumes importance as the capital goods sector acts as a lead indicator, signaling increased pressure on other sectors as well as the overall economy