MF folio addition hit a record high in August on small cap boom

The monthly folio addition by equity mutual funds was at a record 2.2 million in August 2023, the data from Association of Mutual Fund in India (AMFI) showed. The monthly addition in August was twice that of the long-term average.

Of the total folio addition in August, 38% was in the small cap funds, the largest among all equity mutual fund (MF) categories, followed by sectoral funds at 16.4% and midcap funds at 14.2%. The small cap funds accounted for 13.2% of the equity MF folios while the largest contribution was from equity-linked saving scheme (ELSS) funds at 14.6%. The number of small cap folios has overtaken the large cap folios.

The small cap funds have received an inflow of Rs 26,305 crore this year so far, 28% of the total inflow and the highest among all equity fund categories. As a result, the assets under management (AUM) of the small cap funds rose by 61% year-on-year to Rs 1.9 lakh crore at the end of August while the overall equity MF AUM grew by 25% to Rs 18.59 lakh crore.

The total tally of equity MF folio reached 104 million compared with 92.4 million a year ago. It grew by 15% annually in the past four years. Investment per folio was Rs 1,77,502 at the end of August compared with Rs 1,62,219 a year ago. At Rs 2,28,604, dividend funds had the highest investment per folio while ELSS funds had the lowest reading at Rs 1,14, 566.