The mutual fund (MF) industry onboarded over 6 million new investors in 2022 - a 20 percent YoY growth - although 33 percent lower than the additions made in 2021, a report by Business Standard stated.
The net folio addition also declined 19 percent, compared with the previous year, the report revealed, quoting data from the Association of Mutual Funds in India.
It is important to note that the investor count is the total number of permanent account numbers registered with fund houses; folios are the number of active investment accounts for various schemes.
The equity market remained range-bound last year as foreign investors pulled out record sums from the Indian market. While the S&P BSE Sensex gained 5.78 percent, the National Stock Exchange Nifty moved up 4.33 percent. In 2021, the gains were 20 percent and 24 percent, respectively.
Owing to a strong market rally in 2021, the industry added investors and folios at a record pace, said BS. This year, the industry growth was impacted by heightened volatility and lackluster returns, it added.
New investor additions were also hit by a lack of new fund offers by top fund houses, further noted the report.
According to MF distributors, fund launches by bigger players help in investor addition as aggressive marketing and sales strategies are deployed at such times.
The assets under management growth came in at 7 percent in 2022, with the figure rising from an average of ₹37.9 trillion in December 2021 to ₹40.8 trillion in December 2022, informed BS.
Meanwhile, the number of Demat accounts also rose to 10.8 crore in December 2022, a surge of 34 percent on yearly basis, on attractive returns from the equity markets, ease of account opening process and increased financial savings.
While the number of Demat accounts continues to rise, although, at a slower pace, the count of NSE active clients has been falling for six consecutive months. The active user clients in the industry as a whole rose 12 percent year-on-year basis but fell 1 percent month-on-month to 3.5 crores in December 2022.
