Apr—Jul FY’18 MFs equity folio count rises 29 lakh

Equity mutual funds witnessed an addition of over 29 lakh investor accounts or folios in the first four months of the ongoing fiscal, primarily on account of strong participation from retail investors.

This is on top of an addition of 48 lakh folios in the entire past fiscal, 43 lakh folios in 2015-16 and 25 lakh in 2014-15. In the past two years, investor accounts increased mainly due to robust contribution from smaller towns. The sharp rise in folio numbers comes at a time when the benchmark indices – Sensex and Nifty – have been hovering at historical highs.

According to data from the Association of Mutual Funds in India (Amfi) on total investor accounts with 42 active fund houses, the number of equity folios rose to 4,37,69,430 at the end of July, from 4,08,26,211 in March-end, a gain of 29.43 lakh.

Folios are numbers designated to individual investor accounts, though an investor can have multiple ones. Increasing participation from retail investors and good return given by equity schemes have helped the folio counts rise, experts said.

“Contribution towards monthly SIP (systematic investment plans) led to higher positive net inflows in equities. Besides, the industry’s continuous approach to spread awareness about mutual fund products, especially SIPs, have helped in bringing more investors,” said Vidya Bala, Head of Mutual Fund Research, FundsIndia.com.

“Moreover, investors will continue to flock towards equity mutual funds as other investment avenues like real estate and gold are not giving good returns,” she added. SIP is an investment vehicle offered by mutual funds to investors, allowing them to invest using small amounts periodically instead of lump sums. The frequency of investment is usually weekly, monthly or quarterly.

Mutual funds have reported net inflows of over ?41,000 crore in equity schemes in the first four months (April—July period) of the current fiscal. The asset base of equity schemes surged to ?6.29 lakh crore in July-end from ?5.43 lakh crore at the end of March.