MF accounts declined by 36 lakh in 2012-13

The mutual fund industry lost more than 36 lakh (3.6 million) investors, measured in terms of individual accounts or folios, in the 2012-13 financial year.

The last fiscal marked the fourth consecutive year of loss of folios by mutual funds.

During the preceding three financial years, the MF industry had lost over 15 lakh (1.5 million) new investor accounts.

Folios are numbers designated to individual investor accounts, although one investor can have multiple folios.

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As per the latest data compiled by market regulator Sebi (Securities and Exchange Board of India) on total investor accounts with the country's 44 fund houses, the number of folios have fallen to 4.28 crore (42.8 million) at the end of March 2013 from 4.64 crore (46.4 million) in the previous fiscal (2011-12), translating into a decline of 36.23 lakh new investor accounts.

In the past four financial years till 2012-13, the MF industry had lost more than 55 lakh (5.5 million) new investor accounts.      

MF sector, which held 4.75 crore (47.5 million) folios at the end of financial year 2008-09, saw an increase of 366,000 new investors account to 4.8 crore (48 million) in 2009-10.

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However, later the number of folios continued to witness a southward trend and tumbled to 4.28 crore (42.8 million) during the past fiscal year.

Market participants attributed the sharp fall in number of folios to profit booking and various merger schemes in the mutual fund industry, among others.

In 2012-13, the number of investor folios for equity schemes fell by 447000, while the debt funds recorded an increase of close to 900,000 as far as the number of new investor accounts were concerned.

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The total number of folios in equity funds plunged to 3.31 crore (33.1 million) at the end of March 2013 from 3.76 crore (37.6 million) in the previous financial year.

Equity folios form over 70 per cent of the industry's total new investor accounts.

The huge decline in equity folios during the year coincided with a rise of about 8 per cent in the market benchmark Sensex.

The mutual fund industry has been facing consistent equity folio closures in the past few months.

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As per Sebi data, the total number of folios in debt funds rose by 890,000 to 61.38 lakh (6.1 million) at the end of March 2013.

Besides, Exchange traded funds gained 115,000 folios to 740,000 investor accounts at the end of March, this year.

Balanced schemes, which invest in equity and debt category, shed 116,000 folios to end at 26.02 lakh (2.6 million) during the last fiscal.