Driven by strong participation from retail investors, mutual fund (MF) houses have registered an addition of around 62 lakh investor accounts in the first 10 months of the current fiscal, taking the total tally to 5.4 crore. This follows addition of 59 lakh folios in 2015-16 and 22 lakh in 2014-15.
In the last two years, numbers of investor accounts have increased following robust contribution from smaller towns. Folios are numbers designated to individual investor accounts though one investor can have multiple ones.
According to the data from Securities and Exchange Board of India (Sebi) total investor accounts with 43 active fund houses, the number of folios rose to a record 53,781,503 at the end of last month, from 47,663,024 in March-end 2016, a gain of 61.8 lakh.
Retail participation, which continued its momentum from 2015, has shown remarkable resilience to market volatility in the current fiscal year. Besides, huge inflows in equity schemes have contributed to the upside, as per market experts.
Retail investor accounts — defined by folios in equity, equity-linked saving schemes (ELSS) and balanced categories — grew by 43.56 lakh to more than 4.3 crore. Overall, mutual funds have seen an infusion of Rs 3.67 lakh crore, while equity and ELSS alone attracted an impressive inflow of around Rs 55,689 crore.
The huge inflow has helped in increasing assets under management (AUM) of the industry to an all time high of Rs 17.37 lakh crore at the end of January this year, from Rs 12.33 lakh crore at March-end 2016.
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.