The mutual fund investor as it is

The popularity of the mutual fund as an investment vehicle has increased among the retail investors. No longer have the bank fixed deposits (FDs) remained the sole and preferred options for them. Investor accounts have increased significantly from 3.95 crores in September 2014 to 8.56 crores in September 2019. It has shown an increment of 16.7 per cent annually in the same period, which means the number of account holders have more than doubled in the last five years.

Nevertheless, most of the growth has come from the continually rising number of individual investors. They now constitute 90 per cent of the total investor count in the country. This 90 per cent holds 54.1 per cent of the industry’s total AUM. Out of these, most AUMs are being held in equity-dedicated schemes. Equity-oriented schemes derive 87 per cent of their assets from individual investors, that is, retail investors and high net worth individuals (HNIs).

Of all these accounts, 72.2 per cent is for equity-oriented schemes, followed by the Hybrid schemes and Solution-oriented schemes. Purely debt-oriented schemes hold 5.4 per cent of the total accounts.

The average ticket size in the equity scheme is Rs. 1.25 lakhs; however, they also include corporate clients, who have higher ticket size. If we include only retail investors then they have average ticket size of Rs. 59,201. On the other hand, HNIs have average ticket size of Rs. 8.45 lakhs.

In term of the fund categories, the liquid/money market fund has the highest average ticket size. Investors hold Rs 22.4 lakh in liquid funds on average. This may happen because it is mostly the corporates or institutions, which hold liquid AUM. Solution-oriented schemes are mostly held by individuals and have the lowest ticket size of Rs. 31,577.