Financial crisis, slowdown fears and stock market crash have drastically brought down the number of new investors entering mutual fund industry in October.
According to data available from Securities and Exchange Board of India’s Web site, new investor additions during the month was a mere 188,716, compared with 415,472 in September - a near 55 per cent decline.
However, only liquid and tax planner funds witnessed outflows. This was contrary to the industry trend as during October usually liquid plans experience inflows.
Equity
Investors continued to invest in the stock market through fund houses’ equity schemes, especially systematic investment plans, which had the largest investor base in October.
However, despite investors moving out of equity-linked savings scheme, this category was the second.
In a month when investors across the world dumped equity assets, Bombay Stock Exchange’s 30-share Sensex and National Stock Exchange’s 50-share Nifty fell 23.9 per cent and 26.4 per cent, respectively.
On October 27, Sensex had hit an intraday low of 7697.39. The bellwether index remained below 10,000 points from October 23 until month-end.
However, Indian mutual fund investors seem to be coming off age as they not only remained invested in equity schemes, also opened new accounts.
In addition, equity exchange-traded funds’ investor base grew to 21,616 from 17,734 in September.
Gold funds category too saw investors entering the market amid rally in domestic gold prices.
On October 31, Mumbai spot pure gold closed at Rs 11,795 per 10 gm compared with Rs 13,470 per 10 gm on September 30.
Debt funds
Liquid plans that coped up with heavy redemption amid liquidity crisis during October saw 4,320 investors withdrawing their investments.
During early October, severe liquidity crunch had sent call rates soaring to above 20 per cent levels. This prompted companies that had just re-invested after making advance tax payments in September to pull out in order to fund their own operations.
