Overnight funds and long duration funds see highest growth in folio count in FY 24

In an interesting trend, AMFI data shows that two fund categories with opposite duration - Overnight funds and long duration funds recorded the highest growth in folio growth in both absolute and percentage terms.

The data shows that the overnight funds added over 2.70 lakh folio to reach 9 lakh in FY 24 from 6.28 lakh in FY 23. On the other hand, long duration funds saw the total number of folios increase from 45,500 in March 2023 to 65000 in March 2024. Both the categories of funds saw their folio count grew by over 40% in one year.

Next was gilt fund, which recorded a 6% increase by adding over 10,000 new folios last year to reach folio count of 1.87 lakh.

Among debt funds, liquid funds command highest number of folios with a count of 17.82 lakh. Overnight funds and low duration funds followed liquid fund for second and third position, respectively in terms of folio count.  Low duration funds had 8.78 lakh folios in FY 2024.

Fund categories which recorded the highest decline in number of folios were low duration funds, corporate bond funds and short term funds.

Overall, the total number of debt folios increased marginally from 71.60 lakh folios from March 2023 to 71.65 lakh folios in March 2024.

Let us look at the table (in absolute terms) to know more:

Let us look at the table (in percentage terms) to know more:

Chennai MFD Chokkalingam Palaniappan from Prakala Wealth believes that anticipation in interest rate cut is the primary reason for the popularity of long duration funds. Also, many investors use them for STPs.

Delhi MFD Retd. Col. Sanjeev Govil of Hum Fauji Initiatives also echoed a similar sentiment. He said, “For a long time now, investors are anticipating a rate cut from the US federal reserve due to which they are gravitating towards long duration funds for better returns.”