Where are SIP folios showing strength?

  • 15 Feb 2024
  • Read 10 mins read

Why we are looking at SIP folios?

When you buy mutual funds of any AMC, the first thing they do is to assign a unique customer code to you. This is called the folio number and can be your single point identification for all investments across equity funds, debt funds or liquid funds in that particular AMC. However, folios are unique to each AMC, so if you have invested in funds across 4 AMCs, then you would have 4 folios. At times you could have multiple folios under the same AMC, which you can consolidate at any point of time. 

But, why do folios matter. AUM, as a measure of mutual fund growth, is biased towards large investments. On the other hand, the growth in folios gives a first-hand picture of the breadth of retail participation. In this segment, we look at how MF folios at a macro level have grown across various categories. This gives us an idea of where retail money is flowing and which specific fund categories are attracting the maximum amount of retail interest. We look at folios growth on a YOY basis, to make it more representative. 

Know more about sip calculator

 

Macro picture July 2023: how folios grew YoY

For the month of July 2023, compared to July 2022, the total number of mutual fund folios grew 11.69% to 15.14 crore folios.

Macro pictureTotal Folios Jul-23Total Folios Jul-22Folio Growth
Open ended Funds

15,09,87,781

13,50,76,748

11.78%

Closed Ended and Interval Funds

4,33,489

4,96,905

-12.76%

Grand Total

15,14,21,270

13,55,73,653

11.69%

Data Source: AMFI 

The quick takeaway from the above table is that the folios growth continues to be robust and that is largely indicated by the aggressive growth in SIP flows as well as the NFO collections in the recent months. If you look at the macro picture, the growth has come from the folios of open ended funds, which the folios of closed ended funds have actually contracted. That is not too surprising.

Active debt funds July 2023: how folios grew yoy

For the month of July 2023, compared to July 2022, the total number of active debt fund folios grew marginally by 0.17% to 72.58 lakh folios. 

Active Debt Fund CategoriesFolio Growth
Long Duration Fund

100.15%

Overnight Fund

17.33%

Gilt Fund

5.94%

Ultra Short Duration Fund

5.05%

Money Market Fund

4.39%

Dynamic Bond Fund

3.66%

Liquid Fund

2.73%

Gilt Fund with 10 year constant duration

-1.32%

Corporate Bond Fund

-4.08%

Medium Duration Fund

-4.71%

Medium to Long Duration Fund

-5.64%

Low Duration Fund

-7.02%

Short Duration Fund

-7.47%

Floater Fund

-8.57%

Banking and PSU Fund

-8.77%

Credit Risk Fund

-10.79%

Total of Debt Funds

0.17%

Data Source: AMFI

Out of the 16 categories of debt funds available in India, 7 categories of active debt funds showed minimum 1% growth in number of folios yoy while 9 active debt fund categories saw contraction in folios. The doubling of folios of Long Duration Funds may be indicative of growing interest in longer tenure debt, but this is on a small base. Hence it may not be too representative. Debt funds at the short end and long end of duration curve are seeing greater interest this year. Also, the categories of debt funds seeing maximum contraction were discretionary debt funds, with a history of volatile returns. The folios growth has turned positive for active debt funds, after a long break.

Active equity funds July 2023: how folios grew yoy

For the month of july 2023, compared to july 2022, the total number of folios of active equity funds grew by 13.66% to 10.26 crore folios.

Active equity fund categoriesFolio growth
Small cap fund

50.31%

Dividend yield fund

30.05%

Multi cap fund

28.71%

Mid cap fund

22.37%

Value fund/contra fund

20.22%

Large & mid cap fund

12.53%

Sectoral/thematic funds

8.91%

Elss

7.66%

Flexi cap fund

5.67%

Large cap fund

1.31%

Focused fund

-1.31%

Total of equity funds

13.66%

Data source: amfi

Out of the 11 categories of active equity funds available in india, 10 categories of active equity funds showed minimum 1% growth in the number of folios yoy while only focused funds saw contraction in folios, largely due to a slowdown in nfo flows. The story of july 2023 was led by small cap funds increasing their number of folios yoy by more than 50%. This is largely attributed to alpha hunting, although this could taper due to most small cap funds putting restrictions on fresh flows. The large cap funds also saw flat growth in folios as investors increasingly prefer passive index funds and index etfs for large caps due to lower costs. Equity fund folios continue to grow on yoy basis, but the pace of growth is certainly slackening at higher levels of the index.

Hybrid funds July 2023: how folios grew yoy

For the month of july 2023, compared to july 2022, the total number of folios of hybrid funds grew by 3.33% to 1.80 crore folios.

Macro pictureFolio growth
Multi asset allocation fund

42.06%

Retirement fund

3.08%

Aggressive hybrid fund

2.07%

Conservative hybrid fund

1.92%

Dynamic asset allocation / baf

1.29%

Childrens fund

1.22%

Equity savings fund

-0.06%

Arbitrage fund

-12.30%

Total of hybrid funds

3.33%

Data source: amfi

Here we have combined hybrid and solutions due to the similarity. Out of 8 categories in this segment, 6 categories saw expansion in folios. Arbitrage funds saw 12.3 contraction in folios due to market volatility while equity savings funds saw marginal contraction in the absence of nfos. Multi-asset allocation funds attracted a lot of interest due to the natural asset class diversification available and a slew of nfos in recent months. 

Passive funds July 2023: how folios grew yoy

For the month of july 2023, compared to july 2022, the total number of folios of passive funds grew 14.79% to 2.32 crore folios..

Macro pictureFolio growth
Index funds

74.96%

Fund of funds investing overseas

9.04%

Other etfs

5.87%

Gold etf

2.85%

Total of passive funds

14.79%

Data source: amfi

This is the only segment to see folio growth across all the available categories. Index funds saw a spike in folios; with other segment seeing measured growth. Momentum has tapered in the last few months.

Thanks to sips and nfos, the folio growth has been fairly aggressive, with even debt funds finally seeing a revival in folio growth.