Mutual fund debt schemes seem to be a more preferred investment vehicle than equity schemes, indicates data available on the Association of Mutual Funds in India Web site.
Compared with August, equity schemes have seen a fall of more than six lakh folios in September while debt schemes have seen an increase about one lakh folios.
Folios
Apart from equity-focussed schemes, balanced and overseas (funds of funds) schemes also saw a huge drop in numbers, which brought the drop in folios to around seven lakh.
However, debt schemes and exchange traded funds experienced an increase of more than one lakh folios, bringing the net drop in the industry to around 5.8 lakh folios.
“People who had invested during the last bull run and lost money are now booking profits. So they want to exit the markets now,” saidMr Prateek Agrawal, Vice-President and Head-Equity, Bharti AXA Investment Managers Pvt Ltd.
Mr Rakesh Goyal, Senior Vice-President, Bonanza Portfolio Ltd, said: “This is a very popular and conservative phenomenon. When the markets are near the last level, people stuck in the last bull run will want to get out. We are experiencing the same at our counters. High net worth individuals and retail investors are redeeming their units. But they will come back once the market gains by 2,000 points from now.”
Analysts are expecting a small correction soon, else more investments could go debt funds.
“Debt mutual funds are giving returns superior to what even bank deposits are giving. So if bank deposits are growing why won't the number of folios in debt fund schemes increase?” asked Mr Agrawal.
UTI Asset Management Company holds the highest number of folios in the country, around 99 lakh.
They also hold the highest number of debt fund (around 23 lakh) and equity fund (65 lakh) folios.
Benchmark has the highest number of ETF schemes folios at 1.2 lakh, which is up from 1.1 lakh in August. DSP Blackrock commanded the largest chunk of overseas funds folios at 1.1 lakh folios, followed by AIG Global AMC at 38,604 folios.
Though the situation is expected to be the same in the near future, analysts and market experts are requesting investors to stay invested for the long term as they believe that the bull run is far from over.
“There is much more to come in the market. The best bet for investors right now are gilt funds,” added Mr Goyal.
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