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Mutual fund folio growth: how the May 2024 story panned out

11 Jun 2024 , 08:38 AM


Folios or unique mutual fund investor accounts have a special place in the analysis of mutual fund retail traction. AUMs get all the media attention as it is easier to understand and there is a certain grandeur to the Billion dollar figure touted in AUMs. However, there are 3 areas in which the AUM does not deliver the right message to the investors. Firstly, the overall AUM could be influenced by cyclical debt market and treasury flows, which do not reflect commensurate growth in investor interest. In India, especially in debt funds, there are outflows at the end of each quarter and then a bounce next month. Secondly, within equity funds, AUM could be dominated by a few HNI investors. This may give a good picture of overall funds collected, but says little about the retail spread of mutual funds. Thirdly, the biggest shortcoming in AUM is that it is too index dependent. In the last one year, the AUM of equity funds and passive funds have gone up sharply purely on market index accretion, even when the flows have been relatively tepid. It is to fill this gap that folio growth comes into play; offering a better barometer of retail participation in mutual funds in India.


One common misconception is that the folios represent unique investors. That is in correct. For example, in the current Indian context, there are 18.6 Crore investor folios, but the unique investors would be just around 4.6 Crore. That is roughly one-fourth of the total folios. There is a reason for the same. Folios are unique to an investor for each AMC. For instance, when you invest in SBI MF for the first time, a new folios is mapped to your PAN and that becomes an investor account. Future investments through SBI MF (any fund) can be done through the same folios number. However, if you want to invest in one fund of ICICI Pru AMC and one fund of HDFC AMC; you will require unique folios for both. Unique investors are mapped based on your PAN number. To understand the role of folios, let us look at how folios have grown overall you; and then across specific category of mutual funds. We compare folios for the last one year (May 2024 over May 2023).


How does the big picture of mutual fund folios look like in May 2024; across open-ended and close-ended funds?

Macro picture Total Folios May-24 Total Folios May-23 Folio Growth
Open ended Funds 18,54,14,491 14,69,03,892 26.21%
Closed Ended and Interval Funds 5,53,731 4,71,610 17.41%
Grand Total 18,59,68,222 14,73,75,502 26.19%

Data Source: AMFI

At a macro level, the total number of mutual fund folios as of May 2024 stood at 18.60 Crore, compared to 18.15 Crore in April, 17.79 Crore folios  in March 2024, 17.42 Crore folios in February 2024, and 16.96 Crore in January 2024. Each month, the folios have steadily built steam. On a yoy basis, compared to May 2023, total folios are up at a robust 26.19% in May 2024; compared to 23.94% in April 2024, 22.04% in March 2024, 20.76% in February, and 18.70% in January 2024. The traction on folios is progressively higher.

On  yoy basis, it is not just the open ended folios, but even the closed ended folios have grown, and that could be attributed to the FTP (fixed term plans), the only closed ended product that still continues to attract interest among Indian investors. However, at a macro level, the close-ended folios are less than 0.30% of total mutual fund folios.


Debt fund folios had been under pressure for the last few years. By default, the debt fund folios are corporate in nature and they are cyclical. Also, the uncertain interest rate environment has forced investors to gravitate towards the shorter end of the yield curve. For the month of May 2024, active debt fund folios contracted by -1.40%, compared to contraction of -0.83% in the month of April 2024.

Active Debt Funds Total Folios May-24 Total Folios May-23 Folio Growth
Long Duration Fund 65,890 47,319 39.25%
Overnight Fund 8,86,752 6,73,564 31.65%
Gilt Fund 1,88,990 1,79,210 5.46%
Money Market Fund 4,31,251 4,27,143 0.96%
Liquid Fund 17,92,865 17,75,895 0.96%
Ultra Short Duration Fund 6,36,325 6,35,328 0.16%
Dynamic Bond Fund 2,17,675 2,32,928 -6.55%
Medium to Long Duration Fund 99,772 1,06,803 -6.58%
Low Duration Fund 8,63,247 9,33,719 -7.55%
Floater Fund 2,11,929 2,33,630 -9.29%
Corporate Bond Fund 5,41,781 6,11,354 -11.38%
Gilt Fund with 10 year constant duration 37,146 42,253 -12.09%
Short Duration Fund 4,42,312 5,03,633 -12.18%
Medium Duration Fund 2,23,256 2,55,984 -12.79%
Banking and PSU Fund 2,51,252 2,92,621 -14.14%
Credit Risk Fund 2,01,534 2,41,153 -16.43%
Sub Total – Active Debt Funds 70,91,977 71,92,537 -1.40%

Data Source: AMFI

What are the key takeaways from a yoy comparison of debt fund folios as of May 2024? Out of the 16 categories of debt funds as per AMFI classification, only 6 categories showed positive growth in folios. Even out of these 6 categories, only 3 categories had decisive growth in folios, while for the other 3 it was less than 1% growth. The ratio of contracting folios to expanding folios stands at 10:6. This has been constant since February 2024, with the exception of March 2024, when the ratio was unfavourable at 12:4. The leader in terms of folio growth was Long Duration Funds, which grew 39.25% yoy, on a relatively smaller base. Overnight funds also grew folios at 31.65%, despite a higher base. Gilt funds, money market funds, liquid fund, and ultra short duration funds also positive folio growth with the rest showing negative growth in folios.

In terms of folio contraction, it was the same list of standard suspects putting pressure on folio growth? Contraction in folios was pronounced across credit risk funds, banking & PSU funds, medium duration funds, and short duration funds. The folios story shows a general aversion for longer duration bond funds and also for funds with allocation discretion. Bond yields are likely to be driven by the mega RBI dividend of ₹2.11 Crore and a lower fiscal deficit in FY25. However, the pressure of coalition politics could keep debt funds guessing.


In contrast to debt funds, there not much ambivalence in the growth of equity fund folios in May 2024. Active equity funds added 2.95 Crore folios in last one year, across equity fund categories. For equity funds, folio expansion improved further to 29.63% in May 2024 compared to 27.13% in April 2024, 24.96% in March 2024, 23.50% in February 2024; and 21.06% in January 2024. While folios have been added, SIP stoppage ratio has been alarmingly high in May 2024. We will discuss that point separately later.

Active Equity Funds Total Folios May-24 Total Folios May-23 Folio Growth
Small Cap Fund 1,98,32,640 1,15,81,947 71.24%
Sectoral/Thematic Funds 2,05,67,662 1,32,09,299 55.71%
Multi Cap Fund 65,13,410 42,12,703 54.61%
Mid Cap Fund 1,47,90,033 1,08,20,927 36.68%
Value Fund/Contra Fund 65,28,568 47,93,275 36.20%
Dividend Yield Fund 9,25,566 7,41,636 24.80%
Large & Mid Cap Fund 96,41,201 79,10,456 21.88%
Flexi Cap Fund 1,47,75,146 1,27,31,864 16.05%
Large Cap Fund 1,39,88,501 1,29,34,624 8.15%
ELSS 1,63,07,461 1,52,82,099 6.71%
Focused Fund 50,77,097 52,58,096 -3.44%
Sub Total – Active Equity Funds 12,89,47,285 9,94,76,926 29.63%

Data Source: AMFI

In May 2024, a total of 10 out of the 11 categories of equity funds as per AMFI classification saw accretion in folios. That is a strike rate of 91%; the same in the last 4 months. The only equity fund category to see contraction in folios in May 2024 was focused funds, with folios shrinking by -3.44%. As usual, small cap funds led the folio accretion, while sectoral / thematic funds was an impressive second. The revival in small caps shows genuine retail interest back in the markets, irrespective of relative valuations and overpricing concerns.

The big growth stories in terms of equity fund folios were small cap funds at 71.24%, sectoral / thematic funds at 55.71%, multi-Cap funds at 54.61%, mid-cap funds at 36.68%, and value / contra funds at 36.20%. The improved ranking of thematic funds could be attributed to the NFO of HDFC Manufacturing Fund, that raised ₹9,563 Crore in the month. The shift from flexi cap funds to multi-cap funds indicates investors are starting to value allocation and process over visible outcomes. Overall, equity fund folios grew by 29.63% in May 2024; largely thanks to the HDFC Manufacturing Fund NFO during the month.


We have combined hybrid funds and solution-based funds due to their similar profile. Folios have grown across hybrid categories with 100% strike rate of positive folio growth. While multi-asset allocation funds lead the show, other allocation funds are seeing interest.

Hybrid / Solution Funds Total Folios May-24 Total Folios May-23 Folio Growth
Multi Asset Allocation Fund 21,99,811 11,00,383 99.91%
Arbitrage Fund 5,13,594 4,40,134 16.69%
Equity Savings Fund 4,19,698 3,60,308 16.48%
Dynamic Asset Allocation/BAF 46,91,324 44,34,950 5.78%
Retirement Fund 29,13,515 27,68,033 5.26%
Conservative Hybrid Fund 5,41,125 5,17,334 4.60%
Aggressive Hybrid Fund 54,60,124 52,93,071 3.16%
Children’s Fund 29,93,312 29,31,011 2.13%
Sub Total – Hybrid Funds 1,97,32,503 1,78,45,224 10.58%

Data Source: AMFI

All the 8 categories of hybrid funds saw folio expansion in May 2024; with 3 out of these 8 reporting double-digit growth in folios. The best folio growth was seen, once again, in multi asset allocation funds at 99.91% yoy and this comes on a robustly high base. The other segment of equity savings funds also saw investor folios growing by 16.48% yoy. Investors are seriously looking at hybrids like multiple asset allocation funds, BAFs and equity savings funds for allocation across multiple asset class with tactical management. After all, asset allocation that is the answer to 80% of portfolio swings. In fact, three of the top four by folios accretion are asset allocation funds, with arbitrage fund being the sole exception. While NFOs are helping, it is the financial planning compulsion that is boosting hybrids.

Other than the multi asset allocation funds, equity savings funds and arbitrage funds; all the other categories of hybrids only showed single digit growth. Balanced Advantage Funds (BAFs), which enjoys the highest AUM among hybrid funds, has been slow on folio growth, in the absence of NFOs. For hybrid category of funds, number of folios grew by 10.58 in May 2024 compared to 9.54% in April 2024, 8.47% in March 2024, 7.43% in February 2024, and 6.61% in January 2024. It has been inching up progressively.


Passive funds may not have set the markets on fire in terms of AUM growth like in the case of active funds, but they have still added 72.53 Lakh folios YOY. India. Passive category includes equity and debt related index products (index funds and ETFs), apart from gold funds and Fund of Funds (FOF). Here is how folios of passive funds grew YOY in May 2024.

Passive Funds Total Folios May-24 Total Folios May-23 Folio Growth
Index Funds 83,63,709 42,54,905 96.57%
Other ETFs 1,44,77,642 1,20,83,023 19.82%
GOLD ETF 53,20,483 47,28,425 12.52%
Fund of funds investing overseas 14,80,892 13,22,852 11.95%
Sub Total – Passive Funds 2,96,42,726 2,23,89,205 32.40%

Data Source: AMFI

Other than hybrid funds, even passive funds saw expansion in number of folios across all the categories. In fact, the growth in YOY folios of passive funds is the highest among all categories; higher than active funds too. Passive may have had hiccups, but it is not going anywhere in a hurry. The Index funds dominated folio growth at 96.57%, followed by other ETFs at 19.82%, and gold ETFs at 12.52% in May 2024.

Passive fund folio growth, on yoy basis, improved to 32.40% in May 2024, compared to 29.56% in April 2024, 27.57% in March 2024, 26.68% in February 2024, and 24.73% in January 2024. To cut a long story short, folio growth continues to remind us that Indian equity markets are becoming inclusive; not just in terms of active equity fund penetration but also of passive equity fund penetration. Folio growth may not be precise or complete; but offers the best approximation of retail participation and intensity in mutual funds.

Related Tags

  • AUM
  • GoldETF
  • IndexETF
  • IndexFunds
  • MutualFunds
  • PassiveFund
  • SIlverETF
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