Mutual Fund folio influx hits 3-month high in Oct; 600,000 accounts added

Amid an uptick in the equity market, the mutual fund industry has added more than 600,000 investors' account in October, making it the highest addition in the last three months.

In comparison, the industry had added 345,000 new folios in September, 480,000 in August and more than 1 million in July.

Folios are numbers designated to individual investor accounts. An investor can have multiple folios.

According to data from Association of Mutual Funds in India, the number of folios with 44 fund houses rose to 86,256,880 at the end of October, from 85,626,244 in the end of September, registering a gain of 630,000 folios.

This is in line with the BSE's benchmark Sensex gaining nearly 4 per cent last month.

Industry experts said the addition of folios indicates investors' understanding about market risks associated in the mutual fund schemes.

Number of folios under the equity and equity-linked saving schemes rose by 300,000 to 62.1 million in October-end as compared to 61.8 million at the end of preceding month.

The debt-oriented scheme folios count went up by 105,000 to 6.87 million.

Within the debt category, liquid funds continued to top the chart in terms of number of folios at 1.7 million, followed by low duration fund at 936,000 million.

Mutual fund houses witnessed an overall inflow of Rs 1.33 trillion last month after witnessing a redemption of Rs 1.52 trillion in September. The huge inflow could be attributed to debt-oriented schemes, which witnessed an infusion of Rs 1.2 trillion.

Among debt-oriented schemes, liquid funds with investments in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon saw an infusion of Rs 93,203 crore last month as compared to an outflow of Rs 1.4 trillion in September.

Besides, equity mutual funds witnessed a net inflow of around Rs 6,015 crore last month.

The inflow has pushed the asset base of the MF industry, comprising 44 players, by 7.4 per cent to over Rs 26 lakh crore at October-end from Rs 24.5 lakh crore at end-September.