MFs' equity folio count rises by over 48,000 in July

Equity mutual funds witnessed an addition of more than 48,000 investor accounts, or folios, in July helped mainly by a sharp rise in stock market.

This also marks the second 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 (Sebi) data on total investor accounts with 44 fund houses, the number of equity folios rose to 29,313,290 at the end of July from 29,264,713 in the preceding month, registering a gain of 48,577.

The additions came at a time when the market was scaling new highs. The Sensex on Friday closed at 26,419.55, just shy of its all-time closing peak. The NSE Nifty ended at over 7,900-mark for the first time in its history.

Since May this year, the industry has added over 93,000 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.

Besides, the month of 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 close to Rs 17,000 crore net inflows in equity funds in July, which helped the sector grow its folio count.

The moderate addition in equity folios coincided with a gain in BSE's benchmark Sensex by 1.9 per cent last month.

Data shows the industry has gained over 49,000 folios across all scheme categories in July this year. The folio count has increased to 39,119,588 in July from 39,070,429 in the previous month.

However, debt category saw a moderate drop of 2,800 in investor accounts due to revision in taxation of mutual funds in this segment. The total investor count in debt funds rose to 71,31,876 last month from 71,34,685 in June.