Data from Computer Age Management Services (CAMS), over the period 15th Feb to 15th March shows a 50% jump in new mutual fund folios compared to the monthly average since the start of this year. In the first two weeks of March, the market fell by about 30% from its peak in Jan 2020 allowing investors to take advantage of lower stock prices.
CAMS is a Registrar and Transfer Agent (RTA) and services about 68% of the mutual fund market.
Anuj Kumar, President & CEO, CAMS said, “We are seeing a surge both in new folios and purchase transactions since mid- February. As against monthly average of about 6 lakh new folios, we processed over 9 lakh new folios in the past five weeks. Purchase transactions are also trending higher than normal volumes."
To be sure, a single investor can have multiple folios and the 50% jump does not mean that the number of new investors has jumped by 50%. However in general, there is a high correlation between folios and new investors. The jump has also been accompanied by an uptick in flows. Net inflows into open ended equity funds hit an 11 month high in the month of February at ₹10,796 crore. Experts have said that this trend looks to have continued in March. "Despite the sharp falls in the market and reduced workforce and working hours for sales teams and distributors across the industry, flows have held up. This is the first time I'm seeing such a level of resilience among advisors and investors in my long years in the market," said Swarup Mohanty, CEO, Mirae Asset Mutual Fund.