Mutual Fund Update : Number of folios continue to rise for 51st consecutive month

The number of folios largely represent the number of individual investor accounts and has been increasing ever since Modi government came into power. August is the 51st consecutive month that has witnessed a rise in the number of folios.

The total number of Folios as on August 31, 2018 stood at 7.66 crore, while the number of folios under Equity, ELSS and Balanced schemes, wherein maximum investments are from the retail segment stood at 6.41 crore. Another important factor to note is that most of the folios are added in the equity funds. They account for more than 90 per cent of the total folios. Equity funds include pure equity funds, ELSS, balanced funds and ETFs.

For the month of August, income funds recorded only a marginal increase in folios (3.55 per cent) whereas, gold ETF (32,823) and gilt funds (28,147) saw a decline in the number of folios. In percentage terms, liquid funds saw the highest increase in folios (48.19 per cent) followed by equity funds (30%). On the other hand, gilt funds recorded a 30 per cent decline in their total folio count.

Another interesting trend is growth in the folios of overseas fund of funds (FOFs). This is majorly due to the falling rupee. Historically, it has been observed that investments in overseas FOFs gain when rupee depreciates. In the current scenario of falling rupee and strengthening US economy, these funds may seem more attractive to investors. The hardening of yield has also led to investors exiting from the long duration and gilt funds. This is being reflected by that fall in the number of folios in these categories.