Volatility in Indian equity markets has not stopped retail investors from taking the mutual fund route. The latest report from CRISIL shows that, the industry upsurge was led by retail folios, which increased by 54.52 lakh, or 13.6%, to 4.54 crore, in FY16.
Data from the Association of Mutual Funds in India (Amfi) shows that mutual funds added over 59 lakh folios, a record rise of 14% year-on-year, to take the tally to 4.77 crore in FY16. The industry added 18.10 lakh folios in the March quarter, up 3.95% over the December quarter.
Retail folios in equity segment rose by 40.28 lakh (up 13.1%) to 3.49 crore in FY16 despite the market, as represented by Nifty 50, closing the financial year down nearly 9%. Retail folios in the segment marked the sixth consecutive quarter of gains, says CRISIL in its report.
“In the last few years, folios have gone up for the industry and also our fund house. To give an example, average size of systematic investment plan (SIPs) has grown to `3,400, which used to be `2,200 few years ago. The industry growth rate is around 13%, whereas growth from B-15 cities has been 16%. Another interesting information is that, out of total folios in the industry, half of the folios are coming from T-15 cities and remaining from B-15 cities,” says A Balasubramanin, CEO at Birla Sun Life Asset Management Company (AMC).
According to the data from Amfi, equity funds which also include equity-linked saving schemes (ELSS) saw net inflows of `74,024 crore in the financial year 2015-16, a surge of 4.21% as against FY15. Not only the equity funds saw rise in folios, even balanced fund as a category saw surge in folios and assets in the last financial year.
Meanwhile, retail debt folios crossed the 70 lakh mark, with addition of 3.26 lakh (up 4.83%) and 9.74 lakh folios (up 15.96%) in the quarter and FY16, respectively. Folios held by high net worth individuals (HNIs), or those investing `5 lakh crossed the 18 lakh mark. This category added 3.74 lakh folios in FY16 and 0.83 lakh in the March quarter to tally at 18.04 lakh. HNIs preferred to invest mostly in equity, debt and balanced funds.