scorecardresearchEquity MFs favoured over debt funds despite negative stock market returns: Report

Equity MFs favoured over debt funds despite negative stock market returns: Report

Updated: 19 Oct 2022, 11:54 AM IST
TL;DR.
As per the report, the number of folios for debt schemes has declined 6 percent in the 12-month period ended September 2022, whereas on the other hand, equity scheme folios have surged 21 percent.
As per the report, the number of folios for debt schemes has declined 6 percent in the 12-month period ended September 2022, whereas on the other hand, equity scheme folios have surged 21 percent.

As per the report, the number of folios for debt schemes has declined 6 percent in the 12-month period ended September 2022, whereas on the other hand, equity scheme folios have surged 21 percent.

Despite negative returns generated by the stock markets over the past one year, investors have continued to favour equity over debt mutual funds (MFs), a report by Business Standard stated.

As per the report, the number of folios for debt schemes has declined 6 percent in the 12-month period ended September 2022, whereas on the other hand, equity scheme folios have surged 21 percent. Passive schemes, which include exchange-traded funds (ETFs) and index funds, have grown the fastest at 56 percent, it added.

Overall, MFs have added 24 million new folios net in the past one year with a total unique investor count surging 31 percent to 36 million, the report informed, quoting an analysis of data from the Association of Mutual Funds in India (Amfi).

However, it is important to note that MF folios are essentially investors' accounts and one investor can have a number of folios.

The benchmark Sensex and the Nifty logged their all-time highs on October 18, 2021. Since then, they have been on a roller coaster ride. Debt schemes, too, have had a poor show amid rising bond yields and hawkish pivot by central banks, the market daily pointed out.

Within the active equity segment, multicap and smallcap funds added folios at the highest pace, registering a net folio growth of 90 percent and 39 percent, respectively, showed the Amfi data.

Overall, an equity-linked savings scheme (ELSS) is the most popular mutual fund offering. As of September-end 2022, the fund category had a total folio count of 14 million, up 10 percent in the last one year, it further revealed. Meanwhile, Largecap funds, sectoral funds and flexi-cap funds are other most popular categories, said BS.

The data also shows that equity schemes have a 67 percent share in the total open-ended folio count, followed by passive funds, added the report.

Article
Difference between active and passive investment 
First Published: 19 Oct 2022, 11:54 AM IST