MF industry’s folio base continues to show an upward trend. The latest SEBI data shows that the industry has added a total of over 28 lakh folios in seven months, i.e. April-October.
Among categories, equity funds saw the highest growth in folio count. The category saw addition of more than 21 lakh folios. Of this, equity funds added 19.22 lakh folios while ELSS added 2.17 lakh folios.
The increase in folio count in equity is evident by the inflows in equity funds. From April till October, equity funds (including ELSS) have received net inflows of Rs. 59,935 crore. Some part of the money has also gone in new fund offers as the total number of equity funds went up to 407 in October from 383 in April.
“Arbitrage funds have received good inflows after the change in tax structure of debt funds. A lot of investors have shifted from debt to arbitrage funds, says Nikhil Kothari of Etica Wealth Management.
Arbitrage funds are treated as equity funds for taxation.
The total folio count in equity funds went up from 3.19 crore in April to 3.41 crore in October.
Balanced
Balanced funds too saw an addition of 2.26 lakh folios during April-October. Vinod Jain of Jain Investments says “Some investors who are not comfortable with the current valuations are shifting to balanced funds. The category is also seeing interest due to the changes in the tax structure of debt funds. Earlier, investors used to invest in debt and equity separately. Now, with the tax arbitrage going away, they are preferring to invest in balanced funds.”
Debt
The total folio count in debt funds went up to 76.44 lakh in October from 71.86 lakh in April, an increase of 4.58 folios. Gilt and liquid funds added 3,518 and 25,396 folios respectively. In the debt category, income funds added the maximum folios (4.29 lakh).
ETFs
Gold ETFs continued to lose folios due to the lackluster performance of the yellow metal. The category has seen erosion of 22,751 folios in the last seven months. On the other hand, ETFs which track equity indices, continued to gain traction. Equity ETFs added 15,621 folios during the same period.
Overall, the total folio count (across all categories) went up from 4.20 crore in April to 4.48 crore in October.
Change in folio during April-October 2015
