Equity MF folio count up 1.1 million

Equity mutual funds (MFs) witnessed an addition of 1.1 million investor accounts or folios in the first four months of the current financial year, primarily on the back of strong retail participation.

This follows an addition of 2.5 million folios for the entire past financial year.

Folios are numbers designated for individual investor accounts, though one investor can have multiple ones.

According to the Securities and Exchange Board of India (Sebi) data on investor accounts with 44 fund houses, the number of equity folios jumped to 32,858,830 last month from 31,691,619 at March-end, translating to a gain of 1.17 million.

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 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, from 37.7 million in March 2008.

Before 2014-15, there was a complete lull in equity inflows and in generation of new folios, but in the past year, equity markets have come back to life and yielded solid returns.

Industry experts said the heightened investor interest has 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 an increase in folio numbers," an expert said.

Moreover, mutual funds reported net inflows of nearly Rs 39,000 crore in equity schemes in April-July period of 2015-16, helping the industry grow its folio count.

Besides, addition in equity folios helped increase overall folio base to 4.32 crore in June from 4.17 crore at the end of March.