Surge in retail MF accounts points to a bullish mood

MUMBAI: Investors are increasingly using mutual funds as an investment option, as retail investors’ accounts in mutual funds have steadily grown 27% to 4.77 crore from 3.95 crore in September 2014, according to data from AMFI.

While the number of accounts is not an actual indicator of the number of investors, as an individual investor can invest in multiple mutual funds, financial planners believe mutual fund products have caught the fancy of retail investors over the past couple of years.

“A lot of investors are coming in through the SIP route to meet their long-term goals in both equity-oriented and balanced funds. Over the last one year, the number of SIPs have increased from 60 lakh to 94 lakh,” said Himanshu Vyapak, deputy CEO, RelianceMF. In addition, distributors believe investors who had earlier started with smaller SIP amounts are either topping up their SIPs or starting new ones after seeing their benefits.

The past track record of funds has also attracted investors. Despite the ups and downs, these equity-oriented schemes have managed to give returns upwards of 15% per annum.

“Investor education programmes in far flung tier-II and tier-III cities have started to pay off,” said A Balasubramanian, CEO, Birla Mutual Fund. These efforts seemed to have paid off which have resulted in the rise in mutual fund accounts. “Over the last 2-3 years, returns from assets such as real estate and gold have been poor, which has prompted investors to look at equity funds to create wealth for the long term,” said Vishal Dhawan, chief financial planner at Plan Ahead Wealth Advisors.