Mutual fund houses saw a surge of over 40 lakh investor accounts during the first four months of this fiscal, taking the total count to an all-time high of 5.94 crore on strong participation from retail investors. This comes following an addition of 77 lakh folios in the entire 2016-17 and 59 lakh in 2015-16. According to data from the Securities and Exchange Board of India (Sebi) on total investor accounts with 42 active fund houses, the number of folios rose to a record 5,9,420,864 at the end of July, from 5,5,399,631 in March-end, a gain of 40.21 lakh. Folios are numbers designated to individual investor accounts, though one investor can have multiple accounts. The rise in investors’ accounts have come mainly from the retail category, which is evident by the strong double-digit growth in folios in equity, balanced and debt categories, Vidya Bala, head of mutual fund research at FundsIndia.com said. Notably, participation from retail investors, especially from small towns, has been growing. Besides, steps taken by markets regulator Sebi such as giving extra incentives for fund houses expanding into smaller cities, coupled with increasing investor education programmes to increase penetration of mutual funds is paying dividend.
Retail investor accounts — defined by folios in equity, equity-linked saving schemes (ELSS) and balanced categories — grew by over 36 lakh to more than 4.8 crore during the period under review. Overall, mutual funds have seen an infusion of Rs 1.57 lakh crore, while equity and ELSS alone attracted a staggering inflow of over Rs 41,000 crore and balanced fund saw an impressive inflow of more than Rs 30,000 crore. A mutual fund pools the assets of its investors and invests the money on behalf of them. It provides diverse investment instruments like stocks and bonds without requiring investors to make separate purchases and trades.