Mutual fund equity folios at all-time high, with 7.5 mn new ones this year

Mutual fund (MF) equity folios are at an all-time high of 46.63 million, with 7.6 mn additions this year till now. The earlier peak, of 41.1 mn, was in 2009.

The equity segment is dominated by individual and non-wealthy investors, termed retail in sector parlance. It now accounts for three-fourth of all folios.

This year has seen one of the fastest pace of equity additions despite key stock indices trading at lifetime highs. At this pace, MFs are likely to surpass the 50-mn mark by the end of the financial year.

Sundeep Sikka, chief executive officer (CEO) at Reliance Nippon MF, says, "A strong MF wave has begun. Investors are increasingly accepting these as investment vehicles. I believe systematic investment plans (SIPs) are the best way to invest. The good part is investors are realising the importance and potential of investments through this mode. India has a great potential and the fund sector has still a lot to tap."

The number of SIP accounts is nearly 17 mn. Monthly investment through this route is now Rs 6,000 crore, compared to less than Rs 1,000 crore during some of the times after the 2008 global financial crisis. Fund managers have no dearth of money in their hands to pump in the market. Over the past three years, they've put in over Rs 2 lakh crore, a strong counter to any withdrawals by foreign investors.

G Pradeepkumar, CEO of Union MF, says, "This is one of the biggest structural shifts in our markets. Increasing retail participation through MFs gives rise to robust institutional players, which in turn should lead to structurally more stable markets."

During the January-October period of 2017, net inflow into equity schemes was Rs 1.16 lakh crore or nearly Rs 12,000 crore a month.

There are a little over 400 equity-oriented schemes being offered, collectively managing assets worth Rs 7.2 lakh crore.