Equity mutual fund folios surge; rise 30% in last one year

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Mumbai | Published: November 27, 2018 3:04 AM

The number of folios in equity schemes till October stood at 4.87 crore against 3.73 crore in October last year, an increase of 1.14 crore folios

For equity linked saving schemes (ELSS) folios increased by 19.81 lakh, while for balanced funds it went up by 14.26 lakh. (Reuters)

Indian mutual funds have seen a rise in equity folios in the last one year, despite equity markets being volatile.

The number of folios in equity schemes till October stood at 4.87 crore against 3.73 crore in October last year, an increase of 1.14 crore folios, or a 30.56% increase.

For equity linked saving schemes (ELSS) folios increased by 19.81 lakh, while for balanced funds it went up by 14.26 lakh.

Total folios for ELSS as in October stood at 1.11 crore and for balanced schemes it’s 63.36 lakh. Folios are number designated to individual investor account and one investor can have multiple folios for their equity funds. Market participants say that, rise in folios is largely due to the continuous inflows into the equity funds in the last few months. Total folios for all the scheme as on October stood at 7.90 crore as against 6.31 crore as on October, 2017 growth by 1.58 crore.

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“Despite uncertainty in the equity markets, inflows into equity funds have remained strong. However lately we have seen new SIPs (systematic investment plans) slowing down as markets went down in the month of September and October. If markets continue to fall from the current levels we could see inflows into equity fund going down which could also bring down number of folios,” said senior official from a leading fund house.

In the past one year, Nifty Mid cap index and Nifty Small cap index have given negative returns of 12.6% and 28.1% respectively. While, average returns of Midcap funds is -10.70% and Small cap scheme is -15.35% in the last one year, show data from Value Research. While Nifty is up by about 2.7% in the last one year.

The number of new SIPs registered in October stood at 9.35 lakh, the slowest addition in six months. Between May and September, 10 lakh new SIPs were added every month, contributing to the assets of mutual funds. However, in October the numbers have slipped slightly.

In terms of value, the contribution SIPs, however, continues to increase. Data from the Association of Mutual Funds in India (Amfi) show that the total SIP contribution between April and October at Rs 52,472 crore.

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SIPs is an investment plan offered by fund houses wherein investors can invest a fixed amount in a mutual fund scheme periodically at fixed intervals – say once a month instead of making a lump-sum investment. SIPs are similar to a recurring deposit where you deposit a small or fixed amount every month. In the past three-four there has been surge in SIPs as equity markets touched new high. In the financial year, 2016-17 total SIP contribution in the industry was Rs 43,921 crore. While it increased to Rs 67,190 crore in financial year 2017-18, shows the data from Amfi.

However, we have seen investments through lump-sums slowing down in the last few months. In the month of October, equity mutual funds (which includes, equity, ELSS and arbitrage funds) saw inflows of Rs 14,783 crore, highest since February 2018.

But the average monthly inflows into equity schemes in first seven months fell to Rs 10,751 crore from Rs 14,200 crore in 2017-18. Overall mutual fund industry saw inflows of Rs 35,529 crore in October, shows the data from Amfi.

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