Mutual Fund investors are holding funds for longer period now

The number of people, who invest in mutual fund, have increased over the years – the figure is expected to reach 10 crores in next few years. The mutual fund investor base has increased 17.4 per cent in the last one year ending September, 2019. What is also heartening to see is that now most of the investors are holding their investments for a longer period.

The above chart is for ‘only equity-dedicated mutual fund’ investors, which clearly shows that the majority of investors remain invested for more than one year. Compared to 50.51 per cent in the year ending September 2018, 66.7 per cent investors are holding mutual funds for more than a year at present. Hence, two third of the equity MF investors now remain invested for more than one year.

Even in the retail sector, this trend has gained a significant momentum. Now most of the retail investors are acting more maturely, holding their money for more than one year. Almost three fourth of the retail investors have remained invested in the fund for more than one year in the year ending September 2019.

One of the primary reasons for such change in the holding period may be because of the bad performance of schemes, which is forcing investors to remain invested instead of booking losses.