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AMFI data shows that the number of passive fund folios has increased by over 27% from 2.19 crore in March 2023 to 2.80 crore in March 2024.
It is interesting to note that the number of index fund folios have almost doubled from 38.5 lakh to 75.8 lakh in one year.
Among other gainers in passives, number of other ETF, which include equity and debt ETFs folios increased by over 17 lakh from 1.21 crore in March 2023 to 1.38 crore in March 2024.
Similarly, the number of folios in gold ETF also increased from 47 lakh to 51 lakh. Also, overseas FoF folios increased by about 20% from 1.30 lakh to 1.56 lakh.
|
Scheme category |
No. of Folios (March 2024) |
No. of Folios (March 2023) |
Change |
% Change |
|
Index funds |
7576546 |
3853245 |
3723301 |
96.63 |
|
Gold ETF |
5060791 |
4699537 |
361254 |
7.69 |
|
Other ETFs (equity and debt ETFs) |
13767925 |
12064198 |
1703727 |
14.12 |
|
Overseas FoF |
1557288 |
1302024 |
255264 |
19.61 |
|
Total |
27962550 |
21919004 |
6043546 |
27.57 |
Mumbai MFD Sandeep Baravkar of SRS Financial Services attributes the rise in number of index folios to NFOs. He said, “The recently launched NFOs by large AMCs have led to an increase in passive folios. Also, marketing campaigns by AMFI and increasing awareness among investors through MFDs have contributed to this growth.”
Baravkar pointed out that index funds have delivered higher returns than even large cap funds. This has made MFDs more comfortable in pitching index funds to clients.
Mumbai MFD Nimish Ashar attributed the rise in passive folios to popularity of the investment among HNIs. He said, “HNIs are preferring passive funds as a good, low cost product for investment. Besides this, major AMCs are also now entering the passives categories. The good response to their NFOs has contributed to this increase in number of folios.”
Anand MFD Sanjay Patel of Shree Hari Financial Services also pointed to the easy-to-understand nature of index funds as a reason for their increasing popularity. He said, “While the awareness of passives has increased among investors, good returns of index funds have also increased their confidence in them. In addition, index funds are easy to understand and can be tracked through the benchmark. Investors know that good performance of the benchmark will lead to good returns from their index funds. This is why there is a sharp increase in the number of index fund folios. I believe that in the next 5 years, passive folios will outnumber the active folios.”
However, a few experts have a different view. Mumbai MFD Bhavesh Vora of Sernet Financial Services said that the majority of this increase is due to physical and demat folios being counted separately. “I don’t believe that the number of unique investors in passives has increased a lot.”
