The unique investor additions by MFs, which have been on a decline for the past three months, hit a three-year low in April. The industry added around 295,000 new investors during the month, the lowest since June 2023.
The number of investors making their first MF investments in April were down 37 per cent compared to the March tally of 471,000. In February, around 763,600 investors had begun investing in MFs.
“The additions of new investors has slowed as the recent equity fund performances have turned unattractive. This is likely a short-term blip, the growth will pick up as and when the market recovers,” said Akhil Chaturvedi, executive director & chief business officer at Motilal Oswal Asset Management.
The phases of price correction and range-bound movements in the equity market have impacted equity MFs’ showing in the past returns’ charts. Active largecap funds have delivered average returns of just 0.5 per cent in the one-year period. The smallcap and midcap funds returns have improved post a sharp rally in recent weeks; however, they are still in the single digits. The average returns of the two scheme categories stand at around 8.5 per cent, according to data from Value Research.
The investor additions by MFs also depends on the pace of new scheme launches in the popular categories. According to experts, the marketing and distribution push by fund houses during the new fund offering (NFO) periods enhances the reach of MFs to new investors. In April, only one active equity scheme — JioBlackRock Large Cap Fund — completed its NFO period and collected just ₹30 crore.
“The near-term equity fund returns currently are not attractive enough to draw in new investors. The global uncertainty and the equity market volatility may also be leading to people delaying their investment plans. In addition, the slowdown in new fund launches in popular categories may also be a factor,” said Rahul Jain, president and head at Nuvama Wealth.
The total number of unique investors is mapped by the total permanent account number (PAN) registrations. At the end of April 2026, the industry had 61.7 million unique investors.