MF Industry Adds Over 4 Lakh New Debt Funds Folios In July: Report

MF Industry Adds Over 4 Lakh New Debt Funds Folios In July: Report
PTI - 14 August 2020

New Delhi, August 14: The mutual fund industry added over 5.6 lakh investor accounts in July, from 5 lakh new folios in June, taking the total tally to 9.2 crore, primarily on account of contribution from debt schemes.

According to data from Association of Mutual Funds in India (Amfi), the number of folios with 45 fund houses rose to 9,21,05,737 at the end of last month, from 9,15,42,092 at June-end.

Of the total new folios last month, more than 4 lakh were added in debt funds.

Market experts say that the addition of folios suggests that investors were undeterred by the market volatility. Besides, it indicates their understanding of the market risks associated in the mutual fund schemes.

The sector added 6.13 lakh investor accounts in May, 6.82 lakh in April, and 9.1 lakh in March.

"The sharp fall in the markets in the month of March provided a good premise for investors to invest in 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 the mutual funds route.

"This is evident from the sharp surge in the number of folios in April. There was an uptrend in the number of folios in May and June, highlighting investor interest," said Himanshu Srivastava, Associate Director (Manager Research), Morningstar India.

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

The number of folios under equity and equity-linked saving schemes marginally dropped in July. The investor count slipped by 368 crore to 6.37 crore.

Debt schemes folios count went up by 4.25 lakh to 68.85 lakh. Barring overnight funds, all categories in debt funds witnessed a growth in folios.

Corporate bond funds added 60,269 folios in July, followed by 58,379 liquid funds, 54,002 short duration funds, and 51,626 banking and PSU funds. Overall, investors pumped in Rs 89,813 crore into various mutual fund schemes last month.

Fixed income securities or debt funds witnessed an inflow of Rs 91,392 crore, while equity funds saw its first withdrawal in over four years at Rs 2,480 crore.

The inflow has pushed the asset base of the mutual funds industry to Rs 27.12 lakh crore at July-end, from Rs 25.5 lakh crore as on June 30.