Passive funds (index funds and ETFs) have been the biggest drivers behind record folio additions in the mutual fund industry since the onset of covid-19 pandemic.
Index funds, ETFs (including gold) and overseas fund of funds have together added 1.26 crore folios between April 1, 2020 and January 31, 2022, shows AMFI data. As a result, the folio count went up five-folds during the period from just 31.6 lakh to 1.58 crore.
|
Category |
31-Mar-20 |
31-Jan-22 |
change |
change% |
|
Debt |
71,82,144 |
77,51,527 |
5,69,383 |
8 |
|
Equity |
6,43,94,041 |
8,27,30,395 |
1,83,36,354 |
28 |
|
Hybrid |
95,72,715 |
1,12,54,147 |
16,81,432 |
18 |
|
Solution-oriented |
54,36,840 |
55,62,689 |
1,25,849 |
2 |
|
Others |
31,60,311 |
1,58,02,915 |
1,26,42,604 |
400 |
|
Total |
8,97,46,051 |
12,31,01,673 |
3,33,55,622 |
37 |
SEBI data shows that the surge in folio count is high across scheme categories. While gold ETFs registered the highest rate of growth at 558%, folios in index funds grew at a comparatively lower pace of 307%.
|
Passive funds |
31-Mar-20 |
31-Jan-22 |
change |
change% |
|
Index funds |
5,44,075 |
22,16,086 |
16,72,011 |
307 |
|
Gold ETFs |
5,26,671 |
34,64,739 |
29,38,068 |
558 |
|
Other ETFs |
18,99,781 |
89,39,164 |
70,39,383 |
371 |
|
Overseas FoF |
1,89,784 |
11,82,926 |
9,93,142 |
523 |
In absolute terms, equity schemes were the leaders in adding new folios. They together added 1.83 crore accounts during the period, registering a growth of 28%.
On the other hand, debt schemes added just 5.7 lakh new folios. Industry insiders say that this is due to retail clients' preference for equity schemes.
"SIP, which is mostly used by retail investors to invest in equity schemes, is the biggest driver behind folio addition. So logically, folios will grow at a much higher pace in the case of equity as against debt," said G Pradeepkumar, CEO, Union MF.
Mohit Bhatia, Head of Sales and Marketing at Canara Robeco MF, said factors like mediocre returns and freezing of some debt schemes have lowered investor interest in debt funds post the onset of the pandemic.
Solution-oriented is another fund category which is running out of favour. During April 2020-January 2022, they added only 1.26 lakh investor accounts, registering a surge of 2%.
Overall, the total folio count jumped 37% or 3.3 crore. As of January-end 2022, the number of folios stood at 12 crore as against 9 crore at the end of March 2020.
