Why Mutual Funds Are Booming: 81 Lakh New Folios Added in 2 Months | What’s Behind This Boom?

 

According to recent figures from the Association of Mutual Funds in India (AMFI), there are now 18.6 crore mutual fund folios. So, what exactly is a folio? Think of it like a bank account number, but for mutual funds. When you invest through a Systematic Investment Plan (SIP) or make a deposit, you're assigned a folio number by the mutual fund company. This number serves as your unique identifier, similar to how a bank account number works.


In just two months, the Mutual Fund industry has added 81 lakh new folios. Back in March 2024, there were 17.78 crore folios, and by the end of May, that number has jumped by 4.6% to reach 18.6 crore.

Why More Investors Are Choosing Mutual Funds?

People’s views on bank FDs are shifting. More folks are realizing that to grow their money, simply keeping it in a bank isn't enough; they need to invest in mutual funds for better returns. As incomes rise, more new investors are entering the mutual fund space.

The booming stock market and heightened awareness about it are also driving the mutual fund industry's growth.

According to Abhishek Tiwari, CBO of PGIM India Mutual Fund, investors are now seeking assets that can outpace inflation over the long term, and mutual funds offer that potential.

Additionally, big-name cricketers promoting “Mutual Fund Sahi Hai” are boosting awareness significantly. Plus, with numerous finance influencers sharing insights on mutual funds across YouTube and Instagram, more people are becoming informed and interested.

FAQ’s

What is folio?

When you invest through a Systematic Investment Plan (SIP) or contribute to a mutual fund, you receive a unique identifier known as a Folio Number. It's similar to a bank account number but is used by the mutual fund company to track your investments.

What’s the total number of folios currently?

Recent figures from the Association of Mutual Funds in India (AMFI) reveal that the mutual fund industry now has a total of 18.6 crore folios.

By how much have the new folios increased?

In just two months, 81 lakh new folios have been added. The total number of folios was 17.78 crore in March 2024 and has climbed to 18.6 crore by the end of May, marking a growth of 4.6%.

What’s driving the rise in mutual fund investors?

Shift in Attitude Toward Bank FDs: People are realizing that to grow their wealth, they need to invest in mutual funds rather than just keeping money in the bank for better returns.

Rising Incomes: With increasing incomes, more new investors are turning to mutual funds.

Stock Market Growth: The expanding stock market and greater awareness are also contributing to the rise in mutual fund investments.

Celebrity Endorsements: Prominent cricketers are promoting mutual funds with campaigns like “Mutual Fund Sahi Hai.”

Finance Influencers: Experts on YouTube and Instagram are spreading knowledge about mutual funds, boosting interest in them.

×