Mutual funds folio count surges by 18 lakh in June quarter

The mutual fund industry has added 18 lakh investor accounts in three months ended June 30, taking the total tally to 9.15 crore, amid volatile market conditions.

A big chunk of this growth in folio generation is driven by digital platforms - especially in times of the lockdown, said Harsh Jain, co-founder of Groww.

Folios are numbers designated to individual investor accounts. An investor can have multiple folios.

According to data from Association of Mutual Funds in India, the number of folios rose by 17.96 lakh to 9,15,42,092 at the end of June quarter from 8,97,46,051 at the end of March quarter.

In comparison, the 45-player industry had added 26 lakh folios in March quarter.

"The sharp fall in the markets in March provided a good premise for investors to invest in the equity markets. Hence, it's quite likely that many new investors would have found this as an opportune time to invest in the equity markets through mutual funds route," said Himanshu Srivastava, Associate Director Manager Research at Morningstar India.

"This is evident from the sharp surge in the number of folios in the month of April. There was an uptrend in the number of folios in the months of May and June too highlighting investor interest," he added.

Jain said the number of new folios in March quarter is much higher than other quarters because of tax saving investments.

Also, many investors entered the market in March's bottom when the markets had fallen to historic lows which may explain why the number of folios created in March was so high, he said.

"However, if we compare the number of folios created in comparison to the quarters (March and June )even before, the new folios created are at a similar level - between 15 and 18 lakh," he added.

Of the total folios, the number of investor accounts under the equity and equity-linked saving schemes rose by more than 10 lakh to 6.37 crore at June-end as compared to 6.27 crore at the end of March quarter.

The debt oriented schemes folio count went up by 3.24 lakh to 61.35 lakh in June quarter.

Within the debt category, liquid funds continued to top the chart in terms of number of folios at 19.74 lakh, followed by low duration fund at 9.52 lakh.

Overall, investors pumped in Rs 1.24 lakh crore into various mutual fund schemes in three months ended June 2020, with liquid and arbitrage segments contributing the most to the inflow. This follows an outflow of over Rs 94,200 crore in the preceding quarter.

During the quarter under review, Rs 1.1 lakh crore came from debt funds and Rs 11,730 crore from equity-oriented schemes.