Equity mutual funds are in an overdrive, as they witnessed addition of nearly 600,000 investor accounts or folios in the first two months of the financial year, mainly on account of strong retail participation.
This follows an addition of 2.5 million folios in the entire past financial year, 2014-15.
Folios are numbers designated for individual investor accounts though one investor can have multiple ones.
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April last year saw the first rise in more than four years. Prior to 2014-15, the equity MF sector had seen a continuous closure of folios since March 2009 after the global financial crisis hit the market in late 2008. Since March 2009, as many as 15 million folios got closed.
The investor base reached its peak of 41.1 million in March 2009, while it was 37.7 million in March 2008.
Before 2014-15, there was a lull in equity inflows, as well as generation of new folios. In the past year, equity markets have come back to life and yielded solid returns.
Experts said the heightened investor interest led to a sharp increase in retail folios.
“It is the optimism of investors because of which the folios in equity segment have increased. Besides, increased participation by retail investors in equities has led to a increase in folio numbers,” an expert said.
More, mutual funds reported net inflows of over Rs 20,000 crore in equity funds in the first two months (April-May) of the ongoing financial year, helping the sector grow its folio count.
Besides, addition in equity folios has helped in increasing overall folio base to 42.4 million in May from 41.7 million at the end of March.