Owing to a growing traction for mutual funds among investors, the number of folios has grown by over 66 lakh in the first six months of the current fiscal on account of strong participation from retail investors.
Owing to a growing traction for mutual funds among investors, the number of folios has grown by over 66 lakh in the first six months of the current fiscal on account of strong participation from retail investors. 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 62,049,189 at the end of September, from 55,399,631 in March-end, a gain of 6.65 million or 66.5 lakh. Folios are numbers designated to individual investor accounts, though one investor can have multiple accounts. “The rise in number of folios has mainly come from the retail category, which can be seen by growth in folios in equity, balanced and debt segments,” BNP Paribas Mutual Fund Chief Investment Officer Ritesh Jain said.
“Besides, low interest has been attracting investors into mutual funds,” said Vidya Bala, head of mutual fund research at FundsIndia.com. Participation in MFs from retail investors, especially from small towns, has been growing. Further, measures taken by markets regulator Sebi such as giving extra incentives for fund houses expanding to smaller cities, coupled with increasing investor awareness programmes by Asset Management Companies (AMCs) and industry body Amfi to increase penetration of mutual funds also helped.
Retail investor accounts—defined by folios in equity, equity-linked saving schemes (ELSS) and balanced categories— grew by over 61 lakh to more than 5 crore during the period under review. Overall, mutual funds have seen an infusion of Rs 2 lakh crore, while equity, ELSS and balanced categories together attracted an impressive inflow of over Rs 1.27 lakh crore. Going ahead, Atul Kumar, head of equity funds at Quantum Mutual Fund, said that the fund house remain positive on Indian equities over long term.
“High GDP growth relative to rest of the world, increasing consumption and likely investment in infrastructure are key drivers for equity returns. However, we are cautious on equities in the near term. Markets have been running up which is not supported by earnings growth. Most sell side brokers continue to revise their earning estimates downward,” he added. 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.