Equity mutual funds seem to be in top gear as they witnessed addition of over 43 lakh investor accounts or folios in 2016, taking the total tally to nearly 4 crore, mainly on account of strong retail participation.
Investor accounts have been increasing on account of robust contribution from smaller towns.
Folios are numbers designated to individual investor accounts though a single investor can have multiple ones.
According to the data from Securities and Exchange Board of India (Sebi) on total investor accounts with 43 active fund houses, the number of folios in equity and equity-linked saving schemes (ELSS) rose to 390 lakh (3,90,69,193) at the end of December 2016, from 347 lakh (3,47,13,413) in December-end 2015, a gain of 43.56 lakh.
In 2015, the number of folios had climbed by 43.20 lakh.
Retail participation, which continued its momentum from 2015, showed remarkable resilience to market volatility last year too. Besides, huge inflows in equity schemes have contributed to the upside, as per market experts.
Overall, mutual fund houses registered an addition of nearly 70 lakh investor accounts in 2016 taking the total folio size to nearly 5.3 crore.
Retail investor accounts -- defined by folios in equity, equity-linked saving schemes and balanced categories -- grew by 52 lakh to more than 4.22 crore.
Overall, mutual funds have seen an infusion of Rs 2.86 lakh crore, while equity and ELSS alone attracted an impressive inflow of around Rs 51,000 crore.
A mutual fund pools the assets of its investors and invests the money on behalf of them. It provides diverse investment instruments like stocks and bonds without requiring investors to make separate purchases and trades.
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