MF Update: Asset composition of retail investors

Assets managed by the Indian mutual fund industry have increased from Rs 27.26 lakh crore in December 2019 to Rs 30.96 lakh crore in December 2020. It represents a 13.59 per cent increase in the assets over December 2019.   

Most of this growth is generated by the rise in retail investors. They now account for 90.1 per cent of the total mutual fund investors in India. High net worth individuals (HNIs) account for 9 per cent while institutional investors account for 0.8 per cent of the total mutual fund investors.   

The share of retail investors declined  

The value of assets held by individual investors in mutual funds increased from Rs 14.54 lakh crore in December 2019 to Rs 16.17 lakh crore in December 2020, an increase of 11.14 per cent. In the same period, institutional assets have increased from Rs 12.71 lakh crore in December 2020 to Rs 14.80 lakh crore in December 2020, an increase of 16.38 per cent. Now, retail investors account for 52.2 per cent of the total industry assets as compared to 53.4 per cent, in the same month, a year ago.   

Equity leads the race  

Out of the total investors, the majority of them invest in equity dedicated funds. Equity-oriented schemes account for 70.3 per cent of the total accounts, followed by Hybrid Schemes that account for 10.2 per cent and Solution Oriented Schemes share 5.8 per cent of the total account. There has been a decline in the share of equity-oriented schemes in the last year as investors have gone for profit booking while many HNIs are directly investing in equity.    

 Size of investment  

The average ticket size for equity-oriented funds is Rs 1,21,007 at the end of December 2020, where retail investors are the major investors. The highest average ticket size is for liquid funds (Rs 19 lakh) and debt-oriented schemes (Rs 15 lakh). These categories are dominated by institutional investors and hence, have a larger ticket size.   

When we analyse the data overall, retail investors’ average account size is Rs 58,973, which reflects the investment in both equity and debt of individual investors on an average. Earlier (December 19), it used to be Rs 63,701. An institutional investor in the same period has the highest ticket size at Rs 8.26 crore per account, up from Rs 7.6 crore in the same month last year.