MUTUAL FUND FOLIOS STRUGGLE ABOVE THE 23 CRORE MARK
Between January 2025 and February 2025, total number of mutual fund folios grew from 22.92 Crore folios to 23.23 Crore; an accretion of 1.35%. This is much lower than the MOM accretion seen in previous months. Of course, these are unique mutual fund accounts, and the actual unique investors in mutual funds mapped on PAN is just about 5.5 Crore. Over the last 10 years, mutual fund folios have grown 5.9 times from 3.95 Crore to 23.23 Crore. The one thing fund managers would be wary about is the spike in SIP closures; as SIP stoppage ratio was above 100% for second month in a row.
MF FOLIOS: MACRO PICTURE FOR FEBRUARY 2025
Here is the macro picture of mutual fund folio growth for February 2025; across open-ended and close-ended funds?
| Macro picture | Total Folios Feb-25 | Total Folios Feb-24 | Folio Growth |
| Open ended Funds | 23,17,53,772 | 17,36,21,491 | 33.48% |
| Closed Ended and Interval Funds | 5,27,032 | 5,74,044 | -8.19% |
| Grand Total | 23,22,80,804 | 17,41,95,535 | 33.34% |
Data Source: AMFI
At a macro level, the total number of mutual fund folios as of February 2025 stood at 23.23 Crore; compared to 22.92 Crore in January, 22.50 Crore in December, 22.08 Crore in November, 21.65 Crore in October, and 21.05 Crore in September 2024. On a yoy basis, growth in total folios for February 2025 stood at 33.34%; compared to 35.17% in January, 36.46% in December, 36.46% in November, 35.61% in October, and 34.00% in September 2024. The monthly traction has slowed, largely due to a spike in SIP closures.
ACTIVE DEBT FUND FOLIOS CONTRACT, AMID HIGHER DEBT FUND AUM
Debt fund folios are under pressure for last couple of years and that trend continues. However, in February 2025, debt fund AUM was up due to falling bond yields. For February 2025, active debt fund folios contracted by -3.69%; compared to -4.45% in January, -5.17% in December, -5.10% in November, and -2.51% in October 2024. The reversal of treasury and long term debt outflows helped taper the contraction in February 2025.
| Active Debt Funds | Total Folios Feb-25 | Total Folios Feb-24 | Folio Growth |
| Long Duration Fund | 90,221 | 50,699 | 77.95% |
| Gilt Fund | 2,13,316 | 1,82,215 | 17.07% |
| Liquid Fund | 18,77,020 | 17,78,681 | 5.53% |
| Ultra Short Duration Fund | 6,53,071 | 6,35,543 | 2.76% |
| Dynamic Bond Fund | 2,24,121 | 2,19,929 | 1.91% |
| Medium to Long Duration Fund | 1,02,269 | 1,01,160 | 1.10% |
| Money Market Fund | 4,33,869 | 4,33,052 | 0.19% |
| Short Duration Fund | 4,48,732 | 4,57,312 | -1.88% |
| Corporate Bond Fund | 5,29,679 | 5,62,839 | -5.89% |
| Gilt Fund 10Y fixed duration | 35,759 | 38,317 | -6.68% |
| Low Duration Fund | 8,18,446 | 8,83,315 | -7.34% |
| Medium Duration Fund | 2,12,916 | 2,31,903 | -8.19% |
| Banking and PSU Fund | 2,36,084 | 2,59,627 | -9.07% |
| Floater Fund | 1,96,393 | 2,17,967 | -9.90% |
| Credit Risk Fund | 1,81,719 | 2,11,281 | -13.99% |
| Overnight Fund | 6,38,050 | 8,92,025 | -28.47% |
| Sub Total – Active Debt Funds | 68,91,665 | 71,55,865 | -3.69% |
Data Source: AMFI
Out of the 16 categories of debt funds, only 7 categories showed positive growth in folios, with folios of medium to Dynamic Bond funds, Medium to Long Duration Funds, and Money Market Funds growing at under 2% yoy. The leader in terms of folio growth was, once again, Long Duration Funds at 77.95% yoy, followed by gilt funds at 17.07%. Overnight funds saw folio contraction of -28.47% and credit risk funds saw folio contraction of -13.99%. A total of seven debt fund categories saw yoy folio contraction above 6%.
ACTIVE EQUITY FUNDS ADD 4.23 CRORE FOLIOS YOY
In February 2025, active equity funds added 4.23 Crore folios compared to 4.41 Crore folios in January and 4.45 Crore folios in December 2024. For active equity funds, the yoy folio expansion for February 2025 tapered to 35.22%; compared to 37.9% in January, 39.4% in December, 39.5% in November, 38.9% in October, and 37.7% in September 2024.
| Active Equity Funds | Total Folios Feb-25 | Total Folios Feb-24 | Folio Growth |
| Sectoral/Thematic Funds | 3,06,56,958 | 1,74,30,950 | 75.88% |
| Multi Cap Fund | 93,33,418 | 58,68,656 | 59.04% |
| Mid Cap Fund | 2,08,22,194 | 1,37,15,842 | 51.81% |
| Dividend Yield Fund | 11,92,022 | 8,55,919 | 39.27% |
| Value Fund/Contra Fund | 81,78,379 | 60,07,105 | 36.15% |
| Small Cap Fund | 2,48,28,591 | 1,86,64,893 | 33.02% |
| Large & Mid Cap Fund | 1,17,09,986 | 91,05,807 | 28.60% |
| Flexi Cap Fund | 1,76,15,393 | 1,40,02,857 | 25.80% |
| Large Cap Fund | 1,58,64,041 | 1,34,89,341 | 17.60% |
| ELSS | 1,69,75,832 | 1,58,60,893 | 7.03% |
| Focused Fund | 51,97,937 | 50,75,441 | 2.41% |
| Sub Total – Active Equity Funds | 16,23,74,751 | 12,00,77,704 | 35.22% |
Data Source: AMFI
In February 2025, all the 11 active equity fund categories witnessed accretion in folios; although the growth in folios was in single digits in case of focused funds and ELSS funds. The big boost to folio accretion in equity funds came from sectoral / thematic funds at 75.88%; followed by multi-cap funds at 59.04%, and mid-cap funds at 51.81%. A total of 6 equity categories saw folio accretion of over 30%. This list includes sectoral funds, multi-cap funds, mid-cap funds, dividend yield funds, contra funds, and small cap funds. Despite the correction, retail investors have still not given up on alpha hunting!
HYBRID FUNDS – ALLOCATION IS STILL THE JUICY STORY IN HYBRID FUNDS
All the 8 Hybrid and solution funds have shown yoy growth. However, 4 out of the 8 hybrid fund category funds only managed to show single-digit yoy growth in February 2025.
| Hybrid / Solution Funds | Total Folios Feb-25 | Total Folios Feb-24 | Folio Growth |
| Multi Asset Allocation Fund | 29,93,018 | 19,30,545 | 55.03% |
| Arbitrage Fund | 5,89,477 | 4,82,770 | 22.10% |
| Equity Savings Fund | 4,77,138 | 4,01,223 | 18.92% |
| Dynamic Asset Allocation/BAF | 51,39,765 | 45,64,056 | 12.61% |
| Balanced Hybrid Fund | 57,56,004 | 53,85,542 | 6.88% |
| Retirement Fund | 29,93,032 | 28,57,232 | 4.75% |
| Children’s Fund | 30,68,204 | 29,76,977 | 3.06% |
| Conservative Hybrid Fund | 5,47,628 | 5,35,328 | 2.30% |
| Sub Total – Hybrid Funds | 2,15,64,266 | 1,91,33,673 | 12.70% |
Data Source: AMFI
The 8 hybrid funds added 2.43 Million folios in the last 1 year; but with only 4 out of these 8 reporting double-digit folio growth. The best folio growth was once again in multi asset allocation funds at 55.03%, followed by Arbitrage funds at 22.10%, Equity Savings Funds at 18.92%, and Balanced Advantage Funds (BAFs) at 12.61%. Asset allocation across diverse classes appears to be the flavour in hybrids. For hybrid funds, folios grew 12.70% yoy in February 2025; compared to 12.70% in January, 14.28% in December, 14.31% in November, 14.0% in October, and 13.5% in September 2024. Hybrid funds are now all about allocation.
PASSIVE FUNDS ADD 1.37 CRORE FOLIOS YOY
The big story among passive funds in February 2025 is the sharp revival in retail interest as most active equity funds struggle to beat the index.
| Passive Funds | Total Folios Feb-25 | Total Folios Feb-24 | Folio Growth |
| Index Funds | 1,29,67,242 | 72,14,044 | 79.75% |
| Other ETFs | 1,97,36,879 | 1,34,64,269 | 46.59% |
| GOLD ETF | 68,33,014 | 50,23,955 | 36.01% |
| Fund of funds investing overseas | 13,85,955 | 15,51,981 | -10.70% |
| Sub Total – Passive Funds | 4,09,23,090 | 2,72,54,249 | 50.15% |
Data Source: AMFI
Global uncertainty led to folio contraction in international fund of funds (FOF) for the sixth month in a row. Passive fund folios growth at 50.15% yoy was the best among categories. Index funds dominated folio growth at 79.75%, followed by index ETFs at 46.59%, while gold ETFs is gaining traction with 36.01% yoy growth in February 2025. Passive fund folio growth in February 2025 stood at 50.15%; compared to 50.92% in January, 52.4% in December, 52.4% in November, 49.7% in October, and 45.7% in September 2024. It looks like passive folios are the unlikely beneficiaries of the stock market turmoil.