Calcutta, July 14: Around 1.5 lakh retail investors have closed their mutual fund accounts in June.
Portfolios in equity and balanced mutual fund schemes together have declined over 5 lakh since January.
According to the Association of Mutual Funds in India (Amfi), the number of accounts in equity schemes slipped below 4.05 crore at the end of June from around 4.11 crore at the end of January. Balanced funds lost 37,867 accounts in the first six months of the current calendar year.
The loss of investors accounts is only one per cent of the total portfolio in respective fund categories, said Anil Chopra, chief executive officer and director of Bajaj Capital Ltd, a financial product distribution company.
According to Chopra, investors had suffered because of the global financial crisis and rushed to redeem their units the moment the economy started recovering.
Many individual financial advisers closed operations following the ban on entry load and the restructuring of commissions. They advised their clients to close their mutual fund accounts. The distributors either started selling life insurance plans or ventured into other businesses.
The decline in mutual fund accounts could also be attributed to investors consolidating their multiple holdings in various schemes of a fund house into a single portfolio.
A large number of retail investors are increasingly opting for systematic investment plans, adding to the drop in mutual fund portfolios.
However, sales of individual life insurance plans show significant growth since February, and particularly in April and May when the growth was almost 100 per cent compared with the same period in 2009.