Mutual funds add 6.8 million folios in 2019 taking tally to 87 million

Mutual fund industry added 68 lakh folios in 2019 taking the total tally to 8.7 crore, which suggests investors' understanding about market risks associated with such schemes.

However, the pace of growth in folio numbers dropped in 2019 as compared to preceding three years. Industry experts attributed the trend to decline in investors account in debt oriented schemes as they were spooked by credit events in fixed income market.

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

According to the data, the number of folios with 44 fund houses rose to 8.71 crore at the end of December 2019 from 8.03 crore at the end of December 2018, registering a gain of 68 lakh folios.

In comparison, over 1.38 crore investor accounts were added in 2018, more than 1.36 crore in 2017, nearly 70 lakh in 2016 and close to 56 lakh in 2015, data available with markets regulator Sebi showed.

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

The number of folios under equity and equity-linked saving schemes rose by 12.75 lakh to 6.25 crore at the end of December 2019, which is much lower than 1.2 crore added in the preceding year.

Debt-oriented scheme folios count dropped by 43 lakh to 71 lakh. The number of investors' account stood at 1.13 crore.

Assets under management (AUM) of the industry rose by over 13 per cent (Rs 3.15 lakh crore) to Rs 26.77 lakh crore at the end of December, up from Rs 23.62 lakh crore at the end of December 2018 on the back of measures taken by regulator Sebi for boosting investor confidence.

Going ahead, the industry is expected to witness growth in the range of 17-18 per cent in this year and equity funds should see robust inflows as expectations are high about improved equity markets and a revival in economic growth, experts noted.