Equity mutual funds are in an overdrive as they witnessed addition of nearly six lakh investor accounts or folios in the first two months of the fiscal, mainly on account of strong retail participation.
This follows an addition of 25 lakh folios in the entire 2014-15 fiscal.
Folios are numbers designated for individual investor accounts though one investor can have multiple ones.
According to the Securities and Exchange Board of India (SEBI) data on investor accounts with 44 fund houses, the number of equity folios jumped to 3,22,71,536 last month from 3,16,91,619 at March-end, registering a gain of 5.8 lakh.
Equity MF sector saw the first rise in folio count only in April last year. Prior to 2014-15, the sector had seen a continuous closure of folios since March 2009 after the global financial crisis hit the market in late 2008. Since March 2009, as many as 1.5 crore folios got closed.
Investor base reached its peak of 4.11 crore in March 2009 while it was 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 that the heightened investor interest 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 a increase in folio numbers,” an expert said.
Moreover, mutual funds reported net inflows of over Rs 20,000 crore in equity funds in the first two months (April-May) of the ongoing financial year, helping the industry grow its folio count.
Besides, addition in equity folios has helped in increasing the overall folio base to 4.24 crore in May from 4.17 crore at the end of March.