All categories saw addition in folios in December; Equity funds lead

Equity fund folio addition has boosted the domestic mutual fund industry, helping it register over 5.7 lakh more investor accounts in December, according to the data on the Securities and Exchange Board of India (SEBI). Total investor accounts stand at 8.03 crore in December.

In comparison, the 43-player industry had added 7.05 lakh folios in November and 11.5 lakh folios in October last year.

Equity folios halved from 10.6 lakh folios in October to 4.91 lakh folios in December. Equity funds include pure equity, ELSS and balanced funds.

Fund managers attributed the addition in equity fund folios to the matured behaviour of retail investors who were seeing the market fall as an opportunity to invest their surplus money.  Folios are numbers designated for individual investor accounts, though one investor can have multiple accounts.

Folios in equity ETF rose 3.75 percent, gilt funds (3.41 percent) and liquid (2.58 percent) grew at the fastest pace during the review period.

MOM Portfolio count

“This is not surprising as the equity ETF category received large inflows on account of CPSE ETF, while gilt category too saw some traction after the sharp decline in g-sec yields,” said a fund manager from a bank-sponsored fund house.

Interestingly, income funds reported a marginal increase in their folio counts, against the decline observed in the last few months. Income funds reported net outflow during the month, with macroeconomic variables turning favourable. With no further expectation of a rate hike in the near term, the increase in investor folios suggests they may be slowly returning to this category.During the review period, liquid funds were beaten down the most in terms of outflows. The assets under management (AUM) fell in September, but witnessed the addition of 39,171 accounts. Debt funds added 1,845 folio accounts in December.