Slower increase in folios as flows in equities slacken in November

The latest SEBI data on MF industry folios shows that the industry added 7.05 lakh folios in November. The number of folios added during the month were 4.32 lakh lower than what the industry added in October. 

In line with the lower inflows in equity funds, the folio growth in the category dampened too. Compared to October, which recorded healthy folio creation in equities to the tune of 10.6 lakh, the industry added 6.6 lakh new folios in November. 

Equity funds include pure equity, ELSS and balanced funds.

Experts attribute this lower growth numbers to lump sum investors taking the wait and watch approach in face of higher volatility and upcoming elections. 

Mirroring previous month's trend, liquid funds recorded the highest growth in folios in percentage terms. Folios in liquid funds grew at a robust 3.4% during the month. However, owing to smaller base effect the actual increase in folios liquid is 49,631 folios.

The growing interest in liquid funds can be attributed to investors leaning towards safety post the NBFC credit event. Moreover, advisors recommending staggered investments in equities through STP in liquid funds (instead of lump sum) may have also helped shore up their popularity.

Gold ETF, which saw folio erosion to the tune of 2,628 folios in October, added 6,009 folios during the month. Dhanteras, a festival when investors typically purchase gold fell in November this year.  This may have led to the increased interest in gold ETFs.  

Overall, all categories of funds reported a growth in their folios except income funds, which saw a decline in their folio count. 

Industry folio data for month of November 2018