Equity mutual funds added more than 5 lakh investor accounts or folios in the first six months of the current fiscal in view of a sharp rise in the stock market.
Folios are numbers designated to individual investor accounts, though one investor can have multiple folios.
According to the Securities and Exchange Board of India data on investor accounts with 45 fund houses, the number of equity folios rose to 2,96,85,807 at the end of last month from 2,91,80,922 at the end of last fiscal (March 31, 2014), registering a gain of 5,04,885 during April-September.
The additions came at a time when the market was scaling new highs.
April saw the first rise in more than four years. Prior to that, the equity MF sector had seen a continuous closure of folios since March 2009 after the market crashed due to the global financial crisis in late 2008. Since March 2009, it has seen a closure of 1.5 crore folios.
The investor base reached its peak of 4.11 crore in March 2009, while it was 3.77 crore in March 2008.
On the rise in folios in the last six months, analysts said that the robust market performance over the past few months helped investors renew faith in the stock market.
The mutual funds industry reported net inflows of nearly Rs 34,000 crore in equity funds during April-September period of the current fiscal (2014-15), which helped the industry grow its folio count.
“We have been witnessing a continuous rise in investor base into equity mutual funds since April, which is a positive development for the markets. The increase in folios is also due to huge inflows in stock market,” Amrapali Aadya Trading & Investment Equity Research Analyst Ujjal Jana said.
The BSE’s benchmark Sensex surged by 19 per cent in the first six months of the current financial year.