MFs equity folio count expands by over 1 lakh in Aug

Equity mutual funds witnessed an addition of a staggering over one lakh investor accounts or folios in August helped mainly by a sharp rise in stock market.

This also marks the third consecutive monthly rise in investor accounts.

Folios are numbers designated to individual investor accounts, though one investor can have multiple folios.

According to the Securities and Exchange Board of India data on total investor accounts with 45 fund houses, the number of equity folios rose to 2,94,41,948 at the end of August from 2,93,13,290 in the preceding month, a gain of 1,28,658.

In June, the number of equity folios stood at 2.92 crore.

The additions came at a time when the market was scaling new highs.

Since May this year, the industry has added over 2 lakh folios in equity funds. In May, the number of equity mutual fund (MF) folios stood at 2.92 crore, while it was 2.96 crore at April-end.

April saw the first rise in more than four years. Prior to that, the equity MF sector had seen a continuous decline of folios since March 2009 after the market crashed due to the global financial crisis in late 2008. Since March 2009, it has seen a decline of 1.5 crore folios.

The investor base reached at its peak of 4.11 crore in March 2009, while it was 3.77 crore in March 2008.

On the rise in the folios last month, analysts said the robust market performance over the past few months renewed investor faith in stock markets.

Besides, the industry clocked more than Rs 5,200 crore net inflows in equity funds in August, which helped the sector grow its folio count.

The moderate addition in equity folios coincided with a gain in BSE's benchmark Sensex by around three per cent last month.

Data shows the industry has gained over 1.08 lakh folios across all scheme categories in August this year. The folio count has increased to 3,9,22,8176 last month from 3,91,19,588 in July.

However, debt category saw a moderate drop of over 23,500 in investor accounts due to revision in taxation of mutual funds in this segment. The total investor count in debt funds declined to 71,08,349 last month from 71,31,876 in July.