21 Jan 2018 14:00 IST

MF folios touch all-time high of 6.65 crore on strong retail participation

This comes following an addition of 70 lakh mutual fund investor accounts in 2016

Boosted by strong participation from retail investors, the number of mutual fund folios grew by 1.37 crore to an all-time high of 6.65 crore in 2017. This comes following an addition of 70 lakh mutual fund investor accounts in 2016.

Folios are numbers designated to individual investor accounts, though one investor can have multiple accounts.

According to data from the Securities and Exchange Board of India (SEBI) on total investor accounts with 42 active fund houses, the number of folios rose to a record 6,64,86,373 at the end of December 2017 from 5,28,20,155 at December-end 2016 -- a rise of 1.37 crore.

“We are witnessing additions in folio numbers mainly on the back of new folios added to the equity and balanced categories.

“Continuous investor awareness initiatives by asset management companies (AMCs) and regulatory bodies are helping to enhance the financial awareness, which in turn is driving this growth,” Kotak Mutual Fund CIO Equity Harsha Upadhyaya said.

Retail investor accounts

Retail investor accounts -- defined by folios in equity, equity-linked saving schemes (ELSS) and balanced categories -- grew 1.24 crore to more than 5.46 crore during the period under review.

“One unique and heartening feature of the industry’s growth over the past two years has been the increase in number of folios.

“This shows that we are reaching a larger percentage of the population and while we still have a long way to go in terms of penetration, I believe this broader participation in mutual funds lends sustainability to the long-term growth of the industry,” Franklin Templeton Investments President Sanjay Sapre said.

Overall, mutual funds have seen an infusion of Rs. 2 lakh crore, while equity and ELSS alone attracted an impressive inflow of over Rs. 1.5 lakh crore. Over the last few years, MFs have proved to be a low-cost, compliant and transparent way to channelise savings towards financial investments.

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.