As a result of the increasing awareness regarding mutual funds (MFs) in smaller cities and broader industry focus, the B-15 cities (cities beyond top 15) across the country not only witnessed a faster growth in their assets in FY17, but also increased their overall share in the industry assets under management (AUM).
While the industry witnessed a 35.2 per cent jump in its AUM during the financial year 2016-17, the B-15 cities saw their assets rise by 41 per cent. As a result of the faster growth, the share of these cities rose from around 16 per cent (Rs 2,18,703 crore) of the industry AUM in FY16 to 16.9 per cent (Rs 3,09,098 crore) in FY17.
When it comes to investment into equity schemes, the smaller cities fare much better, as more than 50 per cent of their assets are into equity schemes. According to data from the Association of Mutual Funds of India, 53 per cent of the assets of B-15 towns went into equity schemes in the year ended March 2017. By comparison, only 29 per cent of the assets of T-15 (Top 15) towns went into equity schemes. The B-15 cities have a much better share in total equity AUM of the industry and this share went up from 25.2 per cent in FY16 to 27 per cent in FY17.
The data further show that about 25 per cent of assets held by individual investors is from the B-15 locations. Only about 10 per cent of institutional assets come from B-15 locations, as they are concentrated in T-15 locations.
Sundeep Sikka, chief executive officer of Reliance Mutual Fund, said that there has been a big shift in the investment pattern in smaller towns and is a result of both — a nudge from the regulator to bring the B-15 concept and increased focus of players within the industry. “While MF investment was mostly a large city phenomenon earlier, small cities are witnessing the change now with large number of investors coming to MFs. B-15 cities account for more folios than T-15 cities now. Also, each of the top 5 MF players have more than 100 branches in B-15 cities,” said Sikka.