Despite market volatility, there is a surge in the count of mutual fund folios. A major chunk of this growth has been driven by digital platforms, which have been on the rise in the times of the lockdown.
Folios are just numbers that are designated to individual investors, and one investor can have multiple folios.
The number of folios rose from 8,97,46,051 in March to reach 9,15,42,092 at the end of this quarter, as per data from the Association of Mutual Funds in India.
In comparison, the industry added 26 lakh folios in the March quarter.
In March, there was a sharp fall in the markets. This provided a premise for investors to invest in the market. Thus, it is possible that investors found this as an opportunity to invest in equity markets through mutual funds.
The surge in the number of folios in April bears testimony to this fact. The number of folios also increased in May and June, which highlights investor interest in mutual funds.
Also, because of tax-saving investments, the number of new folios in the March quarter is much higher than that of other quarters. Additionally, multiple investors entered the market in March, when the market had fallen to historic lows. This also explains why the number of folios in March was so high.
Comparing the number of folios created now with that of previous quarters, the new folios are at a similar level, somewhere between 15 and 18 lakhs.
Of the total folios, the investors under the equity and equity-linked savings scheme increased by more than 10 lakhs to reach 6.37 crores, in comparison to the 6.27 crores at the end of the March quarter.
Debt oriented scheme folios also went up to reach 61.35 lakhs in the June quarter, having increased by 3.24 lakhs. Within the debt category, liquid funds are on the top of the chart, followed by low duration funds.
All in all, investors have pumped in INR 1.24 lakh crores in different mutual fund schemes in the three months that ended this June quarter. Liquid and arbitrage segments contributed the most to this inflow.
This follows after an outflow on INR 94,200 crores in the preceding quarter.
In the quarter being talked about, INR 1.1 lakh crores came from debt funds, while INR 11,730 crores came from equity.