Mutual fund folios scale 22.08 Crore in November 2024

12 Dec 2024 , 11:23 AM

MUTUAL FUND FOLIOS CROSS 22 CRORE BARRIER

Between October and November 2024, the total number of mutual fund folios grew from 21.65 Crore folios to 22.08 Crore MF folios; an accretion of 1.99% over the previous month. One must remember that these are just folios or unique mutual fund accounts, and the actual unique investors in mutual funds mapped on PAN is just about 5.3 crore. However, folios measure retail intensity much more eloquently than AUM, since folios are not influenced by market cap shifts. Let us look at 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 22.08 Crore folios. That translates into CAGR growth in folios of 17.94%. As most fund managers admit, mutual fund folios and SIPs have just scratched the surface. More so, in a country that has 112 Crore mobile connections, 75 Crore PAN, 70 Crore bank accounts, and 35 Crore insurance policies. Let us look at how the folios have grown in November 2024, compared to last year.

MF FOLIOS: MACRO PICTURE FOR NOVEMBER 2024

Here is the macro picture of mutual fund folio growth for November 2024; across open-ended and close-ended funds?

Macro picture	Total Folios Nov-24	Total Folios Nov-23	Folio Growth
Open ended Funds	22,02,78,805	16,12,26,893	36.63%
Closed Ended and Interval Funds	5,35,582	5,87,690	-8.87%
Grand Total	22,08,14,387	16,18,14,583	36.46%

Data Source: AMFI

At a macro level, the total number of mutual fund folios as of November 2024 stood at 22.08 Crore; compared to 21.65 Crore folios in October 2024, 21.05 Crore in September, 20.45 Crore in August, 19.84 Crore in July, and 19.10 Crore folios in June 2024. On a yoy basis, growth in total folios for November 2024 stood at 36.46%; compared to 35.61% in October, 34.00% in September, 32.60% in August, 31.03% in July, and 28.11% in June 2024. The monthly traction has been slowly and surely building up in terms of folio growth overall.

ACTIVE DEBT FUND FOLIOS CONTRACTS SHARPLY IN NOVEMBER 2024

Debt fund folios had been under pressure for the last couple of years and that trend aggravated in November 2024. However, debt funds, being institutional products, rely less on folios and more on revenue per customer. For November 2024, active debt fund folios contracted by -5.10%; compared to -2.51% in October, -3.24% in September, -3.48% in August, and -3.33% in July 2024. November 2024 has seen a sharp contraction in debt fund folios and reversed the improving trend of the last few months.

Active Debt Funds	Total Folios Nov-24	Total Folios Nov-23	Folio Growth
Long Duration Fund	83,279	47,151	76.62%
Gilt Fund	2,08,762	1,79,708	16.17%
Liquid Fund	18,53,747	17,84,277	3.89%
Ultra Short Duration Fund	6,49,913	6,41,609	1.29%
Dynamic Bond Fund	2,23,453	2,24,067	-0.27%
Medium to Long Duration Fund	1,02,853	1,03,436	-0.56%
Money Market Fund	4,34,210	4,40,876	-1.51%
Short Duration Fund	4,42,798	4,78,711	-7.50%
Low Duration Fund	8,31,739	9,03,392	-7.93%
Gilt Fund 10-Y constant duration	35,969	39,873	-9.79%
Corporate Bond Fund	5,31,349	5,92,971	-10.39%
Floater Fund	2,01,585	2,25,050	-10.43%
Banking and PSU Fund	2,39,394	2,70,984	-11.66%
Medium Duration Fund	2,11,952	2,42,349	-12.54%
Credit Risk Fund	1,86,214	2,21,663	-15.99%
Overnight Fund	6,19,683	8,29,534	-25.30%
Sub Total – Active Debt Funds	68,56,900	72,25,651	-5.10%

Data Source: AMFI

Out of the 16 categories of debt funds as per AMFI classification, only 4 categories showed positive growth in folios. Even out of these 4 categories, only 2 categories (Long Duration Funds and Gilt Funds) had double-digit growth in folios, while liquid funds and ultra-short-duration funds grew in single digits. The leader in terms of folio growth was Long Duration Funds, at 76.62% yoy, followed by gilt funds at 16.17%. A total of 6 active debt funds saw double-digit contraction in folios yoy. This included overnight funds, credit risk funds, medium duration funds, banking & PSU funds, floater funds, and corporate bond funds. The bias was clearly towards folio contraction; with 12 of 16 categories seeing folio contraction.

ACTIVE EQUITY FUNDS ADD 4.36 CRORE FOLIOS YOY

In November 2024, active equity funds added 4.36 Crore folios compared to November  2023. For active equity funds, the yoy folio expansion for November 2024 stood at 39.5%; compared  to 38.9% in October, 37.7% in September, 36.4% in August, 35.0% in July, and 31.9% in June 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 Nov-24	Total Folios Nov-23	Folio Growth
Sectoral/Thematic Funds	2,89,51,310	1,48,76,417	94.61%
Multi Cap Fund	85,77,112	51,43,687	66.75%
Mid Cap Fund	1,89,56,532	1,25,22,817	51.38%
Small Cap Fund	2,35,21,214	1,59,83,476	47.16%
Dividend Yield Fund	11,57,125	8,04,395	43.85%
Value Fund/Contra Fund	78,90,048	55,14,679	43.07%
Large & Mid Cap Fund	1,11,15,277	85,16,474	30.52%
Flexi Cap Fund	1,67,07,838	1,33,67,686	24.99%
Large Cap Fund	1,53,59,112	1,31,48,805	16.81%
ELSS	1,67,71,531	1,55,04,556	8.17%
Focused Fund	51,47,705	51,27,707	0.39%
Sub Total – Active Equity Funds	15,41,54,804	11,05,10,699	39.49%

Data Source: AMFI

In November 2024, a total all the 11 active equity fund categories witnessed accretion in folios. 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 6 equity categories saw yoy folio accretion of more than 40%. This list includes sectoral funds, multi-cap funds, mid-cap funds, small cap funds, dividend yield funds, and value funds. Two trends are visible. Firstly,  there is alpha hunting prevalent even at higher levels of the market indices. Secondly, there appears to be a preference for the rule-based multi-cap funds over flexi-cap funds.

HYBRID FUNDS – GROWING SLOW, BUT GROWING STEADY

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 Nov-24	Total Folios Nov-23	Folio Growth
Multi Asset Allocation Fund	27,68,773	15,24,927	81.57%
Equity Savings Fund	4,66,589	3,83,270	21.74%
Arbitrage Fund	5,64,124	4,64,499	21.45%
Dynamic Asset Allocation/BAF	50,25,177	43,79,845	14.73%
Aggressive Hybrid Fund	56,82,969	53,54,089	6.14%
Retirement Fund	29,75,429	28,30,927	5.10%
Children’s Fund	30,32,199	29,54,303	2.64%
Conservative Hybrid Fund	5,46,121	5,32,921	2.48%
Sub Total – Hybrid Funds	2,10,61,381	1,84,24,781	14.31%

Data Source: AMFI

All the 8 categories of hybrid funds (including solution funds) saw folio expansion in November 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 81.57%, followed by equity savings funds at 21.74%, Arbitrage Funds at 21.45%, and Balanced Advantage Funds (BAFs) at 14.73%. The subtle narrative is that allocation funds are the flavour among hybrids. For the hybrid category funds overall, number of folios grew by 14.31% in November; compared to 14.0% in October, 13.5% in September, 13.8% in August, 12.2% in July, and 11.5% in June 2024. There appears to be a clear shift of retail demand towards diversified asset allocation.

PASSIVE FUNDS PERSIST WITH STRONG FOLIO GROWTH

Passive funds added 1.31 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 Nov-24	Total Folios Nov-23	Folio Growth
Index Funds	1,22,25,285	59,69,122	104.81%
Other ETFs	1,83,47,870	1,27,19,190	44.25%
GOLD ETF	62,52,992	48,91,187	27.84%
Fund of funds investing overseas	13,79,573	14,86,263	-7.18%
Sub Total – Passive Funds	3,82,05,720	2,50,65,762	52.42%

Data Source: AMFI

Like in September and October 2024, international fund of funds (FOF) saw yoy contraction in folios in November 2024 also. This can be attributed to the global uncertainty and regulatory restrictions. Despite that; the growth in passive fund folios yoy is the highest among all categories at 52.42%. Index funds dominated folio growth at 104.81%, followed by index ETFs at 44.25%, and gold ETFs at 27.84% in November 2024. Passive fund folio growth in November 2024 improved sharply to 52.4%; compared to 49.7% in October, 45.7% in September, 42.6% in August, 38.9% in July, and 34.2% in June 2024. In the last few months, passive funds have made a comeback and that is evident not only in the NFO data; but also, in the SIP flows and the lumpsum flows data. Retail folios are surely leaving a strong stamp in folio accretion in equity funds, hybrid funds and passive funds.