Business Bureau :
THE mutual fund industry has added over 3 lakh investor accounts in February, taking the total folio tally to 8.88 crore, which suggests investors’ understanding about market risks associated with such schemes. However, the pace of growth in folio numbers dropped in February compared to the preceding two months. In January, the industry added 14 lakh folios and in December, the number was over 6 lakh. Mutual fund houses added just 2.6 lakh investor accounts in November. 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 with 44 fund houses rose to 8,88,36,162 at the end of February, from 8,85,33,153 in the end of January, registering a gain of 3.03 lakh folios. This comes at a time even as broader market witnessed heavy volatility amid concerns over the impact of coronavirus pandemic. Industry experts said the addition of folios suggests investors’ understanding of the market risks associated in the mutual fund schemes.
Number of folios under the equity and equity-linked saving schemes rose by 6.85 lakh to 6.18 crore in February-end as compared to 6.13 crore at the end of the preceding month. Notably, investment in equity mutual funds rose to an 11-month high of Rs 10,730 crore in February. However, the number of folio count in debt oriented schemes dropped by 6 lakh to 61.88 lakh at February-end from 67.88 lakh at January-end. Within the debt category, liquid funds continued to top the chart in terms of number of folios at nearly 18 lakh, followed by low duration fund at 9.91 lakh.
Overall, mutual fund schemes witnessed an outflow of Rs 1,985 crore last month across all segments, mainly owing to withdrawal from liquid or money market segments. The outflow has pulled down the asset base of the mutual fund sector to Rs 27.23 lakh crore at February-end from Rs 27.86 lakh crore at the end of January.