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The investment mantra that retail investors swear by includes no short cuts to gains

Those who thought that only High Networth Individuals (HNIs) take a long-term view of their Mutual Fund (MFs) schemes better think again. For they have just been beaten to the honour by retail investors.

A recent report by the Association of Mutual Funds of India (AMFI) indicates that quite the opposite of the generally-held belief has been happening.

It would seem that retail investors have been doing their homework regularly to learn about the best options open to them to derive the maximum advantage from their investments. More than that, they have sought to implement it in the market.

The numbers indicate that it is the retail investors who take a long term view of their MF investments rather than HNIs, foreign institutional investors (FIIs), banks or even the domestic institutional investors.

The data made available on the investors holding periods (how long they remain invested) in March, indicates that nearly 46 per cent of retail investors’ assets in equity funds were held for more than 24 months, while only 36.4 per cent of the assets of HNIs were held for the same period.

When it comes to the real biggies of the investment world, banks, financial institutions and FIIs, the percentage comes down to just 18 months in terms of holding their investments in equity funds for a period of 24 months.

But when it comes to a 1-to-2-year period, retail investors were beaten by HNIs who held on to 37.85 per cent of their investments over the period without exiting.

AMFI data further points out that on an overall basis, nearly 82 percent of retail investors assets stayed invested for more than one year in equity funds.

Retail investors also made up around 64.8 per cent of the equity assets that are lying with mutual funds, while they scored even higher in terms of balanced funds, reaching beyond 68.2 per cent.

HNIs remained the second-largest of investors in both equity and balanced funds after it registered 20.5 per cent and 22.2 per cent jump respectively.

As far as debt funds were concerned, it came as no surprise that companies dominated the category. Corporates account for 64.8 per cent of all the debt assets. HNIs were also big investors in debt with a 28.6 per cent share.

Retail investors lagged in the asset base of the debt funds as they made up only 4.1 per cent, the AMFI data for March this year pointed out.

Holding Pattern
Banks/FIs  
Investor Classification  EQUITY   NON-EQUITY
0-1 month 0.43 43.93
1-3 month 0.61 24.25
3-6 month 1.28 7.82
6-12 month 11.35 3.16
12-24 month 67.74 4.28
> 24 month 18.61 16.56
Total   1904.45  16589.98
Corporates  
Investor Classification  EQUITY   NON-EQUITY
0-1 month 3.37 34.46
1-3 month 4.42 13.83
3-6 month 2.48 15.18
6-12 month 9.16 16.72
12-24 month 39.51 14.03
> 24 month 41.07 5.77
Total   13100.6  190967.37
FIIs  
Investor Classification  EQUITY   NON-EQUITY
0-1 month 0 1.1
1-3 month 36.05 14.71
3-6 month 2.54 47.56
6-12 month 21.37 10.62
12-24 month 21.69 21.47
> 24 month 18.35 4.54
Total   1303.17  5765.84
High Networth Individuals  
Investor Classification  EQUITY   NON-EQUITY
0-1 month 1.52 13.46
1-3 month 7.59 16.42
3-6 month 6.09 18.19
6-12 month 10.55 31.95
12-24 month 37.85 13.82
> 24 month 36.41 6.17
Total   28026.35  67561.2
Retail Investors  
Investor Classification  EQUITY   NON-EQUITY
0-1 month 1.75 5.77
1-3 month 2.74 6.09
3-6 month 2.72 8.96
6-12 month 10.77 16.52
12-24 month 35.58 14.55
> 24 month 46.44 48.11
Total   75693.11  16112.5