Equity mutual funds witnessed an addition of over 43 lakh investor accounts or folios in 2015-16, primarily on account of robust contribution from smaller towns
New Delhi: Equity mutual funds witnessed an addition of over 43 lakh investor accounts or folios in 2015-16, primarily on account of robust contribution from smaller towns.
In comparison, equity mutual funds (MFs) added 25 lakh folios in the preceding fiscal.
Folios are numbers designated for individual investor accounts, though one investor can have multiple accounts.
Growing participation from retail investors, especially from small towns, huge inflows in equity schemes and several measures taken by Sebi have led to sharp increase in folios, Sebi Chairman U K Sinha had said last month.
The regulator has given extra incentives for those expanding into smaller cities.
According to the Securities and Exchange Board of India (Sebi) data on investor accounts with 43 fund houses, the number of equity folios jumped to 36,025,062 last month from 31,691,619 in March 2015, a gain of 43.33 lakh.
Prior to 2014-15, the equity MF sector had seen a continuous closure of folios since March 2009, following the global financial crisis in late 2008. Since March 2009, as many as 1.5 crore folios were closed.
Overall, mutual funds witnessed an addition of over 59 lakh investor accounts in the past fiscal, taking the total number of folios to a record 4.76 crore. For a long time, investor accounts were not going beyond 2 crore.
Out of the 59 lakh folios added last fiscal, more than 25 lakh were from small cities.
Mutual funds have reported net inflows of over Rs 74,000 crore in equity and equity-linked savings schemes in last fiscal, helping the industry to grow the folio count.
Interestingly, smaller towns have contributed 44 percent to such inflows.
MFs are investment vehicles made up of a pool of funds collected from a large number of investors and invest in stocks, bonds and money market instruments, among others.