Industry witness fall in folios

The mutual fund industry, for the third consecutive month has witnessed a loss in folios. The fund houses bared a 5.85 lakh reduction in folios in September 2010, thanks to 6.53 lakh folio. reduction in growth/equity oriented schemes.

Total Assets Under Management (AUM) of Mutual Fund (MF) industry fell 7.38% or by Rs 52353 crore to Rs 6.57 lakh crore in September. Fund flow into mutual fund (MF) industry turned out negative in September as there had been net outflow of Rs 71838 crore compared with net inflow of Rs 36185 crore in August. There had been huge outflows from liquid funds, income funds and equity funds. The outflows from income and liquid funds accounted for Rs 64745 crore while outflows from equity funds stood at Rs 7011 crore.

Profit booking had been causing outflows from equity funds during September with the Sensex and Nifty rising over 11.6%. Some of the investors have redeemed their investments from the underperforming equity funds and also were booking profits & diversifying their investments into other assets classes. For the second quarter of this fiscal there have been outflows from the equity funds to a tune of over Rs 13000 crore.

Similarly, equity folios (representing the number of investor accounts) of mutual funds saw a sharp decline of over 6.53 lakh in September. Investors seem to be redeeming equity fund units on the back of rising equity markets to book profits and uncertainty over its direction, going forward. Total equity folios stood at 3.94 crore in September as compared to 4.00 crore in August. Meanwhile, total folios (including debt and others) also saw a dip of 5.85 lakh and were at 4.71 crore in September with high reduction in equity folios. However, the income/debt schemes folio increased by 1.03 lakh in September over August or by 2%. In the previous 11 months (between November 09 to September 10), the number of folios declined by 7.30 lakh, which in context to June rise of 70503.

Fund house wise, of the top five fund houses in the country, only HDFC Asset Management Company (AMC) has seen an increase of 40,999 in folio numbers in September to around 41.99 lakh folios. The other four fund houses saw a drop — Birla Sun Life Mutual Fund by 33,598 to 24.06 lakh; ICICI Prudential Mutual Fund by 37,224 to 28.75 lakh; UTI Mutual Fund by 64,464 to 99.71 lakh, and Reliance Mutual Fund by 79,442 to 72.51 lakh. SBI Mutual Fund registered the highest fall in folios by 80055, followed by Reliance Mutual Fund and UTI Mutual Fund.

Source: http://www.apollosindhoori.cmlinks.com/MutualFund/MFSnapShot.aspx?opt=9&SecId=10&SubSecId=22,24#