Equity Mutual Funds - Addition of 3,500 Folios A Day.

7 lakh new equity accounts have been opened between 2014 April and October

India’s equity mutual funds (MFs) are cheering this year (2014), with local investors coming back to the segment in droves.

* At Rs. 38,770 crore, net inflows into equity MF schemes in the first seven months (April to October) of 2014-15 have already exceeded those in all previous years, except the Rs. 47,000 crore during 2007-08, the year when the previous bull market was at its peak.

* Net inflows of Rs 5,600 crore in October this 2014 year (Rs, 5,427 crore in equity mutual funds and Rs. 173 crore in equity-linked savings schemes, or / ELSS) took the total beyond the previous second-best - Rs. 36,675 crore during 2005-06.

* According to mutual fund industry experts, the outlook remains bullish. Mr. 0Milind Barve, MD, HDFC Mutual Fund, said: “Clearly, there has been a strong return to equity as an asset class. The industry is witnessing such inflows after a gap of  6 or7 years. Investors are fast realising that they can not afford to miss the segment.”

* The fear of missing out on the share market rally has also seen more investor accounts (Folios), being opened.

* Nearly 7 lakh new equity accounts have been opened between 2014 April and October. This is an average net addition of 3,500 folios a day.

* The total number of equity mutual fund investor accounts is closing in on the 3 crore mark, at 2.99 crore.

* At the beginning of the year - 2014, the number stood at 2.91 crore , the lowest since the investor base had touched a high of about 4.1 crorein 2008-09.

* Nearly 85 lakh folios were closed in the past 2 financial years.

* Now, India’s top 5 cities  - Mumbai, Delhi, Kolkata, Chennai and Bengaluru - account for about  72% of total assets under management (AUM) of the mutual fundindustry.

* Officials suggest places beyond the top 15 cities, referred to as the B-15 cities, would play a more significant role.

* Mr. Nimesh Shah, MD,  ICICI Prudential Mutual Fund, said: “We are witnessing an increased level of enthusiasm for distributing mutual funds in B - 15 cities. With the equity market generating superior returns in the last few months, a reasonable breadth of B -15 investors has been built. They are happy with their investments and the momentum is only increasing.”

* Mr. Sundeep Sikka, CEO, Reliance Mutual Fund (Also Chairman of the Association of Mutual Funds in India or / AMFI),  said: “I believe a large part of growth in the mutual fund industry will come from B -15 locations in the long term. Now, 15% to 20% of equity inflows come from B - 15 locations; the aim is to increase folios, along with sale of simpler products like systematic investment plans (SIPs), from these locations. the share of B15 folios in overall retail folios moved up from 43% to 48% in the 15 months ended June, 2014.

* As on October 31, 2014  the Indian Mutual Fudn industry offered 390 equity-related mutual fund schemes, managing an asset size of Rs. 2.97 lakh crore. Equity assets now account for 27% of the Rs, 10.95 lakh crore worth of assets under management(AUM).

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