MUTUAL FUND FOLIOS CROSS 21 CRORE BARRIER
In the last 3 months between July 2024 and October 2024, the total number of mutual fund folios have grown from 19.84 Crore folios to 21.65 Crore MF folios; an accretion of 9.12% in just the last 3 months. This is just the folios or unique mutual fund accounts, and the actual unique investors in mutual funds mapped on PAN is just about 5.2 crore. However, folios are a better measure of retail intensity compared to AUM since they are not influenced by market value shifts. Things become a lot clearer if you look at the folio growth over the last 10 years. As of June 2014, the total number of mutual fund folios stood at just 3.95 Crore. Between 2014 and 2024, the number of folios have grown more than 5-fold to 21.65 Crore folios. That translates into CAGR growth in folios of 17.88%. However, the potential is still huge. India has 110 Crore mobile connections, 75 Crore PAN numbers, 70 Crore bank accounts, and 35 Crore insurance policy holders. In comparison, the mutual funds have just about scratched the surface. Let us look at the macro picture of folio growth in Oct-24.
MF FOLIOS: MACRO PICTURE FOR OCTOBER 2024
Here is the macro picture of mutual fund folio growth for October 2024; across open-ended and close-ended funds?
| Macro picture | Total Folios Oct-24 | Total Folios Oct-23 | Folio Growth |
| Open ended Funds | 21,59,65,231 | 15,90,37,754 | 35.79% |
| Closed Ended and Interval Funds | 5,37,573 | 6,09,036 | -11.73% |
| Grand Total | 21,65,02,804 | 15,96,46,790 | 35.61% |
Data Source: AMFI
At a macro level, the total number of mutual fund folios as of October 2024 stood at 21.65 Crore; compared to 21.05 Crore folios in September, 20.45 Crore folios in August, 19.84 Crore folios in July, 19.10 Crore folios in June, and 18.60 Crore folios in May 2024. On a yoy basis, growth in total folios for October 2024 stood at 35.61%; compared to 34.00% in September, 32.60% in August, 31.03% in July, 28.11% in June, and 26.19% in May 2024. The monthly traction has been slowly and surely building up in terms of folio growth overall.
ACTIVE DEBT FUND FOLIOS GROWTH NEGATIVE IN OCTOBER 2024
Debt fund folios had been under pressure for the last couple of years and that trend has continued in October 2024 also. However, debt funds, being institutional products, rely less on folios and more on revenue per customer. For October 2024, active debt fund folios contracted by -2.51%; compared to -3.24% in September, -3.48% in August, -3.33% in July, and -2.69% in June 2024. October 2024 has seen relatively less pressure on debt folios.
| Active Debt Funds | Total Folios Oct-24 | Total Folios Oct-23 | Folio Growth |
| Long Duration Fund | 81,956 | 47,276 | 73.36% |
| Gilt Fund | 2,08,193 | 1,80,231 | 15.51% |
| Overnight Fund | 8,64,240 | 8,10,709 | 6.60% |
| Liquid Fund | 18,13,501 | 17,88,040 | 1.42% |
| Ultra Short Duration Fund | 6,46,163 | 6,42,181 | 0.62% |
| Medium to Long Duration Fund | 1,03,352 | 1,04,197 | -0.81% |
| Dynamic Bond Fund | 2,23,129 | 2,25,769 | -1.17% |
| Money Market Fund | 4,33,304 | 4,40,649 | -1.67% |
| Short Duration Fund | 4,41,637 | 4,83,490 | -8.66% |
| Low Duration Fund | 8,32,921 | 9,12,380 | -8.71% |
| Gilt Fund 10-Y constant duration | 36,136 | 40,273 | -10.27% |
| Floater Fund | 2,02,188 | 2,26,798 | -10.85% |
| Banking and PSU Fund | 2,40,644 | 2,70,881 | -11.16% |
| Corporate Bond Fund | 5,31,745 | 5,98,670 | -11.18% |
| Medium Duration Fund | 2,11,734 | 2,44,807 | -13.51% |
| Credit Risk Fund | 1,87,979 | 2,24,249 | -16.17% |
| Sub Total – Active Debt Funds | 70,58,822 | 72,40,600 | -2.51% |
Data Source: AMFI
Out of the 16 categories of debt funds as per AMFI classification, only 5 categories showed positive growth in folios. Even out of these 5 categories, only 2 categories (Long Duration Funds and Gilt Funds) had double-digit growth in folios, while overnight funds, liquid funds and ultra-short-duration funds grew in single digits. The leader in terms of folio growth was Long Duration Funds, at 73.36% yoy, followed by gilt funds at 15.51%. A total of 6 active debt funds saw double-digit contraction in folios yoy. This included credit risk funds, medium duration funds, corporate bond funds, banking & PSU funds, floater funds, and Gilt Funds with 10-Year constant duration. The bias was clearly towards folio contraction.
ACTIVE EQUITY FUNDS ADD 4.23 CRORE FOLIOS YOY
In October 2024, active equity funds added 4.23 Crore folios compared to October 2023. For active equity funds, the yoy folio expansion for October 2024 stood at 38.9%; compared to 37.7% in September, 36.4% in August, 35.0% in July, 31.9% in June, and 29.6% in May 2024. Folio additions in active equity funds are an outcome of a combination of record SIP flows and robust NFOs across select equity fund categories.
| Active Equity Funds | Total Folios Oct-24 | Total Folios Oct-23 | Folio Growth |
| Sectoral/Thematic Funds | 2,83,54,673 | 1,46,31,293 | 93.79% |
| Multi Cap Fund | 83,35,703 | 50,21,790 | 65.99% |
| Mid Cap Fund | 1,83,50,102 | 1,22,44,014 | 49.87% |
| Small Cap Fund | 2,29,90,319 | 1,53,46,265 | 49.81% |
| Value Fund/Contra Fund | 77,37,187 | 54,16,399 | 42.85% |
| Dividend Yield Fund | 11,36,234 | 7,96,208 | 42.71% |
| Large & Mid Cap Fund | 1,08,99,702 | 84,14,596 | 29.53% |
| Flexi Cap Fund | 1,64,04,408 | 1,32,64,789 | 23.67% |
| Large Cap Fund | 1,51,50,734 | 1,31,20,371 | 15.47% |
| ELSS | 1,67,13,074 | 1,54,71,152 | 8.03% |
| Focused Fund | 51,25,180 | 51,47,044 | -0.42% |
| Sub Total – Active Equity Funds | 15,11,97,316 | 10,88,73,921 | 38.87% |
Data Source: AMFI
In October 2024, a total of 10 out of 11 categories of equity funds saw accretion in folios. The only equity fund category to see contraction in folios was focused funds, with folios shrinking by -0.42%. The big boost to folio accretion in equity funds has come from sectoral funds, multi-cap funds, mid-cap funds and small cap funds. A total of six equity categories saw yoy folio accretion of more than 40%. This list includes sectoral funds, multi-cap funds, mid-cap funds, small cap funds, value funds, and dividend yield funds. The growth in thematic funds has been driven by NFOs due to their unique concentrated appeal and the absence of restrictions on the number of thematic funds that can be launched by an AMC.
HYBRID FUNDS – HIT 100% STRIKE RATE ALL OVER AGAIN
Hybrid funds and solution-based funds combined have all shown yoy growth. Multi-asset allocation funds lead the pecking order, but other allocation funds are seeing traction too.
| Hybrid / Solution Funds | Total Folios Oct-24 | Total Folios Oct-23 | Folio Growth |
| Multi Asset Allocation Fund | 26,97,332 | 14,69,736 | 83.52% |
| Arbitrage Fund | 5,57,388 | 4,55,636 | 22.33% |
| Equity Savings Fund | 4,61,251 | 3,80,418 | 21.25% |
| Dynamic Asset Allocation/BAF | 49,81,730 | 43,65,084 | 14.13% |
| Aggressive Hybrid Fund | 56,41,570 | 53,49,511 | 5.46% |
| Retirement Fund | 29,68,142 | 28,24,070 | 5.10% |
| Conservative Hybrid Fund | 5,54,084 | 5,32,260 | 4.10% |
| Children’s Fund | 30,24,509 | 29,49,631 | 2.54% |
| Sub Total – Hybrid Funds | 2,08,86,006 | 1,83,26,346 | 13.97% |
Data Source: AMFI
All the 8 categories of hybrid funds (including solution funds) saw folio expansion in September 2024; with 4 out of these 8 reporting double-digit folio growth. The best folio growth was once again in multi asset allocation funds at 83.52%, followed by arbitrage funds at 22.33%, equity savings funds at 21.25%, and BAFs at 14.13%. Clearly allocation funds are the flavour among hybrids. For the hybrid category funds overall, number of folios grew 14.0% in October 2024; compared to 13.5% in September, 13.8% in August, 12.2% in July, 11.5% in June, and 10.6% in May 2024. Asset allocation and surge in NFOs, appears to be driving the growth in folios for hybrid funds.
PASSIVE FUNDS SHOW STRONG FOLIO GROWTH
Passive funds added 1.22 Crore folios yoy. Passive category includes equity and debt related index products (index funds and ETFs), gold ETFs, silver ETFs, and the international (FOFs).
| Passive Funds | Total Folios Oct-24 | Total Folios Oct-23 | Folio Growth |
| Index Funds | 1,19,03,173 | 56,91,078 | 109.15% |
| Other ETFs | 1,76,22,661 | 1,26,23,786 | 39.60% |
| GOLD ETF | 59,13,163 | 48,33,807 | 22.33% |
| Fund of funds investing overseas | 13,84,090 | 14,48,216 | -4.43% |
| Sub Total – Passive Funds | 3,68,23,087 | 2,45,96,887 | 49.71% |
Data Source: AMFI
Like in September 2024, the category of international fund of funds (FOF) saw contraction in folios yoy in October 2024 too. This is attributed to the global uncertainty and regulatory restrictions. Despite that; the growth in passive fund folios yoy is the highest among all categories at 49.71%. Index funds dominated folio growth at 109.15%, followed by index ETFs at 39.6%, and gold ETFs at 22.33% in October 2024. Passive fund folio growth in October 2024 improved sharply to 49.7%; compared to 45.7% in September, 42.6% in August, 38.9% in July, 34.2% in June, and 32.4% in May 2024. In last few months, passive funds are back in the reckoning and have also dominated the NFOs in October 2024. Retail folios are surely leaving a strong stamp in folio accretion in equity funds, hybrid funds and passive funds.