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Mutual fund industry lost 32 lakh investors in 10 months of FY13

Mutual fund industry lost 32 lakh investors in 10 months of FY13

The mutual fund industry lost more than 32 lakh investors, measured in terms of individual accounts or folios, in the first 10 months of the current financial year.

The mutual fund industry lost more than 32 lakh investors, measured in terms of individual accounts or folios, in the first 10 months of the current financial year.

"The number of folios, have fallen to 4.32 crore at the end of January from 4.64 crore in the previous fiscal (2011-12), translating into a decline of 32.45 lakh new investor accounts," according to the latest data of the Securities and Exchange Board of India (Sebi) about total investor accounts with the country's 44 fund houses.

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

Equity schemes were the biggest losers in terms of folios, losing 40.2 lakh new investor accounts. The total number of folios in equity funds plunged to 3.36 crore at the end of January 2013 from 3.76 crore in the previous financial year.

The benchmark BSE Sensex has gained over 14 per cent in the current financial year so far (April 2012-January 13). According to market participants, investors have used market rally as an opportunity to exit after booking profits.

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

The mutual fund industry has been facing consistent equity folio closures in the past few months. Besides, equity schemes have seen outflows for the last eight months, with January witnessing an outflow of Rs 2,501 crore.

"The sharp fall in the number of folios can be attributed to profit booking and various merger scheme in the mutual fund industry among others," Quantum Asset Management Company CEO Jimmy Patel said.

Balanced schemes, which invest in equity and debt category, followed closely and shed 1.11 lakh folios to end at 26.07 lakh in January.

Exchange traded funds gained 1.09 lakh folios to 7.32 lakh investor accounts at the end of January.

With inputs from PTI