Mutual fund folio continues upward trajectory; industry adds 47 lakh investors' accounts in January
NEW DELHI: Mutual fund industry has seen an uptick in folios, with the addition of 46.7 lakh investors' accounts in January, fuelled by increasing awareness about the financial instrument and ease of transactions through digitisation.
Over the past year, average folio additions were 22.3 lakh per month and the latest figure was more than double this level.
With this addition, mutual fund folios of the industry stood a shade away of 17 crore at 16.96 crore currently, a surge of 19 per cent from 14.28 crore registered a year earlier, latest data with the Association of Mutual Funds in India (AMFI) showed.
On a month-on-month basis, the industry has seen a growth close to 3 per cent in folio numbers from 16.49 crore recorded in December 2023.
Folios are numbers designated to individual investor accounts. An investor can have multiple folios.
WhiteOak Mutual Fund Chief Business Officer Prateek Pant said that factors such as high levels of digital literacy, rising disposable incomes, and increased financial literacy have encouraged Indians to look beyond traditional financial instruments like fixed deposits and post office saving schemes, etc, and venture into mutual funds.
Over the last few years, the surge in mutual fund folios has been led by Gen-Y and Gen-Z investors. Millennials, also known as Gen Y, are typically defined as those born between 1981 and 1996. Generation Z, or GenZ, are those born between 1997 and 2012.
Interestingly, the majority of the new investors are taking the route of digital channels for entering into the mutual fund space, he added.
Of the total 46.7 lakh folios, equity-oriented mutual fund schemes experienced an addition of 34.7 lakh folios during the month under review.
This has taken such folios to a new high of 11.68 crore, representing 69 per cent of the total folios, according to an update by Geojit.
Also, Hybrid funds added 3.36 lakh folios on a month-on-month basis taking the total count to 1.31 crore. On the other hand, folios in debt schemes continue to drop for the fifth month in a row in January to a total of 74.66 lakh.
Since mutual funds are the most convenient and the best way to invest in equities, more and more investors are flocking towards them, industry experts said, adding that despite the robust growth in folio count over the past few years, mutual fund penetration remains low, with less than 3 per cent of India's population having MF exposure.
Overall, the 45-player mutual fund industry has close to Rs 53 lakh crore assets under management.