Mutual funds equity folio rise by 3.65 lakh in April-May

Equity mutual funds witnessed an addition of more than 3.65 lakh investor accounts or folios in the first two months of the current fiscal, mainly on account of strong participation from retail investors.

This is on top of an addition of 43 lakh folios in 2015-16 and 25 lakh in 2014-15. In the past two years, investor accounts increased mainly due to robust contribution from smaller towns.

Folios are numbers designated for individual investor accounts, though one investor can have multiple accounts.

According to the Securities and Exchange Board of India (Sebi) data on investor accounts with 43 fund houses, the number of equity folios jumped to 3,63,90,441 last month from 3,60,25,062 in March 2016, a gain of 3.65 lakh.

Growing participation from retail investors and huge inflows in equity schemes have helped in increasing the folio counts, experts said.

Mutual funds have reported a net inflow of over Rs 8,900 crore in equity schemes during the period under review. This include Rs 4,438 crore in April and another Rs 4,721 crore in May.

The net inflow is in line with BSE's benchmark Sensex rising 5.23 per cent during April-May.

Mutual funds are investment vehicles made up of a pool of funds collected from a large number of investors. The funds are invested in stocks, bonds and money market instruments, among others.