“As India’s per capita income grows, investors will look to save money in asset classes, which have the potential to beat inflation and create wealth. As the penetration of mutual funds increases, this will translate into a higher folio base at the industry level,” Abhishek Tiwari, CBO, PGIM India Mutual Fund, told PTI
Mumbai: The mutual fund industry has added over 8.1 million investors’ accounts in the first two months of the current fiscal (FY25), mainly due to consistent marketing efforts, celebrity endorsements and dedicated work of the distribution network.
Additionally, changing perceptions about fixed deposits, which no longer offer competitive returns compared to mutual funds, and the rise in income levels and accessibility to financial markets have also contributed to the rise in new investors, Trivesh D, COO of stock trading platform Tradejini, told PTI.
Going ahead, the outlook for mutual fund folios remains strong, supported by the ongoing bull run in the stock market, solid risk management practices, continuous investor education, and consistent marketing efforts, he added.
Moreover, the industry will continue to see decent growth as savers increasingly look for alternative avenues to create wealth for their long-term goals, experts said.
“As India’s per capita income grows, investors will look to save money in asset classes, which have the potential to beat inflation and create wealth. As the penetration of mutual funds increases, this will translate into a higher folio base at the industry level,” Abhishek Tiwari, CBO, PGIM India Mutual Fund, told PTI.
According to the latest data with the Association of Mutual Funds in India (AMFI), mutual fund folios of the industry stood at 186 million in May-end, a surge of 4.6 per cent from 177.8 million registered at the end of March.
This suggests an addition of over 8.1 million folios.
In May, the industry saw an addition of 4.5 million folios compared to 3.611 million folios added in April. In 2023, the average monthly addition of folios was 2.23 million, making the latest figure more than double this average.
This impressive growth was fuelled by consistent marketing efforts, celebrity endorsements, dedicated work of the distribution network, robust returns given by equities and ease of investing, experts said.
Folios are numbers designated to individual investor accounts. An investor can have multiple folios.
Interestingly, the majority of the new investors are taking the route of digital channels to enter into the mutual fund space. Over the last few years, the surge in mutual fund folios has been led by Gen-Y and Gen-Z investors.