Why more investors are rushing to mutual fund houses

Driven by addition in equity fund folios, mutual fund houses have registered a rise of over 3.5 lakh investor accounts in the first eight months of the ongoing 2014-15 fiscal.

The addition comes after fund houses lost about 33 lakh investor accounts in the entire previous fiscal.

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

According to the Securities and Exchange Board of India (Sebi) data on total investor accounts with 45 fund houses, the number of folios rose to 3.99 crore at the end of November 30, 2014 from 3.95 crore in the last fiscal (2013-14), registering a gain of 3.54 lakh.

Explaining the reason behind such rise in retail folios, industry officials said growth is mainly on account of addition in equity fund folios, which was supported by sharp rally in the stock markets.

Besides, the fund houses have clocked Rs 1.55 lakh crore net inflows in various schemes during April-October period.

The BSE Sensex surged by around 28 per cent during the period under review on the back of hopes of economic reforms and heavy capital inflows.

The equity category saw addition of more than eight lakh folios to over 3 crore investors at the end of October 31, 2014. The segment saw first rise in folios in the month of April after reporting a consistent decline in investor accounts in past four years.