Retail rush for flexi cap mutual funds takes July folios to new high

Retail rush for flexi cap mutual funds takes July folios to new high

The growing affinity of retail investors towards flexi-cap and sectoral funds has led to domestic equity funds adding 2.16 million folios in July 2021, the highest on record for a month, according to data from the Association of Mutual Funds of India.

The net folio addition in July was nearly five times the monthly average for the last two years. This is the third month in a row equity funds have witnessed more than a million folios.

Since this April, equity funds have recorded a net folio addition of more than 5.3 million compared with 3 million in the entire fiscal year ended March 31, 2021. The total tally of equity fund folios was 71.1 million at the end of last month. Of this, 18% was contributed by sectoral funds. Large-caps accounted for 15.3% and flexi-caps for another 13.3%, while the balance was other categories.

Equity funds contribute about 67% to the total industry folio count of 105.4 million, which also included debt, hybrid, solution-oriented schemes, ETF (exchange traded funds) and closed-ended schemes. The net folio monthly addition for all schemes totalled 2.9 million in July.

Sustained buoyancy in net flows, supported by an encouraging response to new fund offers of flexi-cap schemes, resulted in cumulative folio count under retail scheme reaching 87.2 million in July, an all-time high. Retail folio accounts for 87% of the total industry folio and contributed 46% of the industry-wide assets under management of ₹35.31 lakh crore.

In July 2021, flexi-cap funds witnessed the highest folio addition among equity categories at 576,000, primarily driven by the new fund offer of ICICI Prudential AMC which garnered an incremental inflow of ₹9,808 crore. Funds mobilised in July 2021 totalled ₹17,332 crore, of which equity funds accounted for ₹13,709 crore. In July, the contribution of equity funds to the total new fund mobilisation was one the highest since April 2019 for which data were available.

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