The year 2018 has been a volatile one so far for both equity and debt markets. However, investors seem to be resilient to market vagaries. This is reflected in the steady increase in number of folios. In the one year period ending August 2018, the industry has added over 1.57 crore folios.
Not surprisingly, majority of these folios came in equity funds. In fact, of the total 1.57 crore folios, close to 1.5 crore folios were in equity funds. Equity funds include pure equity funds, ELSS, balanced funds and ETFs. Income funds recorded only a marginal increase in folios (3.55%). Meanwhile, gold ETF (32,823) and gilt funds (28,147) saw a decline in folios.
In percentage terms, liquid funds saw the highest increase in folios (48.19%) followed by equity funds (30%). On the other hand, gilt funds recorded a 30% decline in their total folio count.
Increase in folios in the last one year
|
Category |
No. of folios as on August 2017 |
No. of folios as on August 2018 |
Change |
Change (%) |
|
Equity |
3,59,15,275 |
4,70,26,968 |
1,11,11,693 |
30.94% |
|
ELSS |
89,47,465 |
1,08,86,732 |
19,39,267 |
21.67% |
|
Balanced |
45,08,019 |
62,21,766 |
17,13,747 |
38.02% |
|
ETFs |
5,41,789 |
7,72,116 |
2,30,327 |
42.51% |
|
Gold ETFs |
3,55,205 |
3,22,382 |
-32,823 |
-9.24% |
|
Income Funds |
94,78,423 |
98,14,576 |
3,36,153 |
3.55% |
|
Gilts |
93,186 |
65,039 |
-28,147 |
-30.21% |
|
Liquid |
9,09,367 |
13,47,616 |
4,38,249 |
48.19% |
|
Overseas FOFs |
1,00,721 |
1,08,648 |
7,927 |
7.87% |
|
Total |
60849508 |
76565940 |
1,57,16,432 |
25.83% |
Source: SEBI
The month of August saw 10.8 lakh new folios being added. The monthly trend was in line with the annual data. Equity funds saw majority of the inflows. Amongst equity funds, balanced funds recorded fastest growth in folios (2.16%). Overall, liquid fund folios grew at a remarkable rate of 6.16% during the month. Overseas fund of funds (FOFs) too saw a growth in folios. Generally, investments in overseas FOFs gain when rupee depreciates. In the current scenario of falling rupee, and strengthening US economy these funds may seem more attractive to investors.
Meanwhile, long duration and gilt funds saw a fall their folios decline. This could in part be due to higher yields translating into lower demand for duration funds.
Folios added in the month of August
|
Category |
No. of folios as on July 2018 |
No. of folios as on August 2018 |
Change |
Change (%) |
|
Equity |
4,62,38,270 |
4,70,26,968 |
7,88,698 |
1.71% |
|
ELSS |
1,07,78,980 |
1,08,86,732 |
1,07,752 |
1.00% |
|
Balanced |
60,89,922 |
62,21,766 |
1,31,844 |
2.16% |
|
ETFs |
7,82,371 |
7,72,116 |
-10,255 |
-1.31% |
|
Gold ETFs |
3,23,943 |
3,22,382 |
-1,561 |
-0.48% |
|
Income Funds |
98,32,148 |
98,14,576 |
-17,572 |
-0.18% |
|
Gilts |
65,123 |
65,039 |
-84 |
-0.13% |
|
Liquid |
12,69,384 |
13,47,616 |
78,232 |
6.16% |
|
Overseas FOFs |
1,05,896 |
1,08,648 |
2,752 |
2.60% |
|
Total |
7,54,86,134 |
7,65,65,940 |
10,79,806 |
1.43% |
Source: SEBI
Overall, the steady increase in folios despite market fluctuations is a heartening trend. N S Venkatesh, CEO AMFI, in a recent media conference mentioned that this is the 51st month of increasing retail folios. “This growth in face of market volatility shows that the mutual fund industry is growing meaningfully. SEBI regulations, investor education initiatives by AMFI and steps taken by all fund houses to spread awareness about mutual funds have aided the growth,” he added.
