Equity mutual funds witnessed an addition of 20 lakh investor accounts or folios during the April-February period of the current fiscal (2014-15) on account of a sharp rally in stock markets.
Folios are numbers designated to individual investor accounts, though one investor can have multiple folios.
As per latest data on investor accounts with 45 fund houses, the number of equity folios rose to 3.14 crore last month, from 2.94 crore during the full fiscal 2013-14, a gain of 20 lakh folios.
April saw the first rise in folio count in more than four years. Prior to that, the equity mutual fund (MF) sector had seen a continuous closure of folios since March 2009 after the market crashed in late 2008 due to the global financial crisis.
Since March 2009, the sector has seen a closure of 1.5 crore folios. The investor base reached its peak of 4.11 crore in March 2009, while it was 3.77 crore in March 2008.
Since early 2014, equity market sentiment took a positive turn, which generated significant interest from overseas investors.
This was mainly on account of expectations from the new government at the Centre, leading to stock markets adopting a bullish tone.
“Besides, the growth in equity markets has been noticed by retail investors and since May 2014, we have seen month-on-month positive net sales in equity mutual funds,” an expert said.
Interestingly, folio count has been increasing especially in the country’s smaller towns — known as beyond-15 cities (B15) with total number of retail folios in such cities recently overtaking the number of folios from T-15 (top 15) cities for the first time, he added.
