Equity funds and Passive funds drive folios growth in FY22

Fund Category	Folios (Mar-21)	Folios (Mar-22)	Change (Nos.)	Change (%)
Multi Cap Fund	13,96,229	30,82,531	16,86,302	120.78%
Small Cap Fund	50,55,627	78,70,459	28,14,832	55.68%
Sectoral/Thematic Funds	78,77,874	1,18,94,913	40,17,039	50.99%
Flexi Cap Fund	83,70,526	1,16,48,458	32,77,932	39.16%
Large & Mid Cap Fund	50,17,194	67,29,990	17,12,796	34.14%
Mid Cap Fund	66,60,657	87,05,192	20,44,535	30.70%
Focused Fund	39,27,912	50,67,076	11,39,164	29.00%
Large Cap Fund	1,05,81,870	1,24,44,858	18,62,988	17.61%
Dividend Yield Fund	5,02,856	5,67,533	64,677	12.86%
ELSS	1,26,04,158	1,38,96,408	12,92,250	10.25%
Value Fund/Contra Fund	37,49,461	40,22,810	2,73,349	7.29%
Folios of Equity Funds	6,57,44,364	8,59,30,228	2,01,85,864	30.70%

Active equity funds were the big drivers of folio growth. Nearly two third of the overall folio growth in FY22 was accounted for by active equity funds. There are 3 trends visible. The funds that saw the most NFOs in the year like multi-cap funds, sectoral funds, flexi cap funds and mid-cap funds were among the big folio accretion stories of FY22. The second trend was a lot of alpha hunting by investors. This saw a lot of folio accretion in mid-cap funds, small cap funds, sectoral funds etc.

However, on the downside, the general underperformers saw tepid folio accretion. For instance, categories like value funds, ELSS funds and dividend yield funds were the tepid performers in terms of folio accretion. That is understandable in a year when the Nifty itself gave returns of over 18% amidst volatility.

How folio accretion panned out for Hybrid Funds?

Fund Category	Folios (Mar-21)	Folios (Mar-22)	Change (Nos.)	Change (%)
Balanced Advantage Fund	28,40,426	42,45,466	14,05,040	49.47%
Conservative Hybrid Fund	3,81,152	5,04,505	1,23,353	32.36%
Equity Savings Fund	2,89,451	3,54,715	65,264	22.55%
Arbitrage Fund	4,38,567	4,99,685	61,118	13.94%
Multi Asset Allocation Fund	7,19,116	7,95,488	76,372	10.62%
Aggressive Hybrid Fund	47,53,093	50,50,651	2,97,558	6.26%
Folios of Hybrid Funds	94,21,805	1,14,50,510	20,28,705	21.53%

Hybrid fund threw an interesting picture. Overall folio accretion was 21.53% as the total number of folios crossed the 1.14 crore mark. The big 49.5% accretion in folios came from the Balanced Advantage Funds or Dynamic Funds, which also saw most high profile NFOs during the year. Interestingly, in terms of folio accretion, conservative hybrid funds did a lot better than aggressive hybrids, indicating that investors preferred to either run with the hares or hunt with the hounds.

How folio accretion panned out for Passive Funds?

Fund Category	Folios (Mar-21)	Folios (Mar-22)	Change (Nos.)	Change (%)
GOLD ETF	12,99,324	42,41,840	29,42,516	226.47%
Other ETFs	42,55,464	1,05,41,730	62,86,266	147.72%
Index Funds	10,14,993	24,69,089	14,54,096	143.26%
Fund of funds investing overseas	6,96,682	12,54,895	5,58,213	80.12%
Folios of Passive Funds	72,66,463	1,85,07,554	1,12,41,091	154.70%

Finally, we come to the rather interesting story of passive funds. Folio accretion, despite a low base, was impressive at 155% yoy. However, the number of passive folios at 1.85 crore is just behind active equity funds. The two big stories from the folio growth in FY22 are; the equity shift is almost inexorable and investors are increasingly looking at passive asset classes.