38% investors redeem their MF investment within 6 months
In its recent survey on investor behaviour titled SEBI Investor Survey 2015, the market regulator found that most investors redeem their mutual fund investments within 6 months.
The survey, which was conducted among a sample of 1494 urban MF investors shows that 38% investors hold their investments for less than 6 months. The survey found that 19% of respondents stay on with the MF investors until a year. While 21% of the investors hold their MF investments for one to three years, 22% stay on beyond three years.
According to the survey, although 58% claim that they will hold on to their MF investments in times of market volatility, less than a quarter of investors continue with their MF investments beyond a three-year period.
"This is analogous to the AMFI data that shows that 47% of MF investors stay invested in the same scheme for less than a year while 36% invest for holding periods of over 3 years. Since benefits of equity or mutual funds holdings are especially realized when held in the long run, this quick turnover of MF investments indicates an obvious sign of investor impatience – i.e., when investors engage in profit making too quickly or offload their investments too early due to downward market trends," says the report.