Recent SEBI data on MF industry folios shows that the industry added a whopping 1.6 crore folios in just one year period ending on September 2018.
This optimistic retail participation is both surprising and encouraging on back of volatility in the markets over much of the last one year period. A quick analyse of one-year average return across categories of mutual funds shows that most categories delivered lacklustre performance. While the long-term historical performance is largely intact, volatile markets have eroded the short-term returns. The continued retail participation in these uncertain markets could indicate investor maturity and belief in the long-term India growth story.
In line with the trend, majority of the folios were in equity funds. Equity schemes added close to 1.13 crore folios in the one year period ending September 2018. If we consider the total folios added by equity, balanced, ELSS and ETFs then the number grows to 1.51 crore. This effectively means that 96% of the industry folios have come in equity type of schemes.
However, if we consider rate of growth then liquid schemes outpaced all the other categories growing at a commendable rate of 50%. Overall, the category added close to 4.7 lakh folios during the year. Typically, investments in liquid funds come from corporates. This substantial increase in liquid folios may indicate a burgeoning interest in liquid funds from retail investors. Two factors which may have led to this increase is folios is advisors recommending STPs to their clients instead of lump sum investments due to volatile markets and liquid funds providing better risk-adjusted returns than debt funds in the current increasing interest rate scenario.
Overall, majority of the fund categories reported a growth in their folios. Gold ETF and gilt funds were the only categories to see a decline in their folio count.
Industry folio data for the first half of FY 2018-19
|
Category |
Folio as on September 2017 |
Folios as September 2018 |
Absolute Change |
Change (%) |
|
Equity |
3,67,24,297 |
4,81,17,778 |
1,13,93,481 |
31% |
|
ELSS |
90,63,044 |
1,10,12,590 |
19,49,546 |
22% |
|
Balanced |
47,24,082 |
62,78,352 |
15,54,270 |
33% |
|
ETFs other |
5,41,477 |
7,77,110 |
2,35,633 |
44% |
|
ETFs gold |
3,49,641 |
3,20,328 |
-29,313 |
-8% |
|
Income funds |
95,21,468 |
98,00,968 |
2,79,500 |
3% |
|
Gilt |
93,819 |
63,867 |
-29,952 |
-32% |
|
Liquid |
9,32,841 |
14,01,496 |
4,68,655 |
50% |
|
Fund of funds investing overseas |
98,462 |
1,14,010 |
15,548 |
16% |
|
Total |
6,20,49,189 |
7,78,86,596 |
1,58,37,407 |
26% |
Source: SEBI
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