New Delhi: Equity mutual funds witnessed an addition of over 11 lakh investor accounts or folios in the first four months of the current fiscal (2015-16), primarily on the back of strong retail participation.
This follows an addition of 25 lakh folios for the entire last fiscal, 2014-15.
Folios are numbers designated for individual investor accounts, though one investor can have multiple ones.
According to Securities and Exchange Board of India (Sebi) data on investor accounts with 44 fund houses, the number of equity folios jumped to 32,858,830 last month from 31,691,619 at March-end, translating a gain of 11.67 lakh.
April last year saw the first rise in more than four years. Prior to 2014-15, the equity MF sector had seen a continuous closure of folios since March 2009 after the global financial crisis in late 2008. Since March 2009, as many as 1.5 crore folios got closed.
The investor base reached its peak of 4.11 crore in March 2009 while it stood at 3.77 crore in March 2008.
Before 2014-15, there was a complete lull in equity inflows as well as generation of new folios, but in the past one year, equity markets have come back to life and yielded solid returns.
Industry experts said the heightened investor interest has led to a sharp increase in retail folios.
“It is the optimism of investors because of which the folios in equity segment have increased. Besides, increased participation by retail investors in equities has led to an increase in folio numbers,” an expert said.
Moreover, mutual funds reported net inflows of nearly Rs 39,000 crore in equity schemes in April-July period of 2015-16, helping the industry grow its folio count.
Besides, addition in equity folios helped increase overall folio base to 4.32 crore in June from 4.17 crore at the end of March.