Pace of equity folio additions hits 8-year high

India's mutual fund sector is witnessing the fastest growth in the number of equity accounts this year, highest in eight years. The sector is opening nearly 11,000 equity accounts daily. From FY11 to FY14, there was widespread redemption from these schemes, leading to rampant closures of equity accounts. However, things have changed this year. What is encouraging is that the Systematic Investment Plans (SIPs) book has seen growth of 40 per cent in the past year, according to data available with Computer Age Management Services (CAMS). The average monthly size of SIPs has also improved to about Rs 3,000 per account, against Rs 2,800 a year ago. Sectoral entities conducted several road shows to educate investors about the importance and benefits of investments through SIP mode.

Though the numbers are encouraging, the investors' base is nowhere near the earlier peak of 2007-08. Sectoral executives are hopeful the trend will continue. Currently, the sector has about 34 million equity accounts, with a combined asset size of about Rs 4 lakh crore. The number of individual investors is believed to be about 10 million.