Equity mutual funds added 2 million investor accounts or folios during the April-February period of the current fiscal (2014-15) on account of a sharp rally in stock markets.
Folios are numbers designated to individual investor accounts, though one investor can have multiple folios.
As per latest data on investor accounts with 45 fund houses, the number of equity folios rose to 31.4 million last month, from 29.4 million in 2013-14. April saw the first rise in folio count after the global financial crisis of 2008. Since March 2009, the sector has seen a closure of 15 million folios.
Industry experts said a strong rally in equity markets and the consequent rise in investors’ interest led to a sharp increase in retail folios.
Since early 2014, equity market sentiment turned positive, generating significant interest from overseas investors. This was mainly on account of expectations from the new government at the Centre, leading to stock markets adopting a bullish tone.
“Besides, the growth in equity markets has been noticed by retail investors and since May 2014, we have seen month-on-month positive net sales in equity mutual funds,” an expert said.
Interestingly, folio count has been increasing especially in the country’s smaller towns with the total number of retail folios in such cities recently overtaking the number of folios from the top 15 cities for the first time, he added.