Contribution of investors in mutual funds from smaller cities is on a rise.
AMFI’s geographical AUM data shows that B15 cities account for AUM of Rs.3 lakh crore or 15% of overall AUM as on June 2017.
The data shows that Nagpur has moved up to secure its position in the list of T15 cities with an AUM of Rs.8,912 crore in June 2017 as against AUM of Rs.6,075 crore in June 2016, a growth of 47% in its AUM.
Nagpur-based IFA Ranjit Dani of Think Consultants attributed this growth to the larger participation of retail investors in mutual funds. “Nagpur has witnessed healthy increase in the AUM of mutual funds over the last one year. While most of the equity AUM has come from retail investors through SIPs, large corporate houses and PSUs have increased their exposure to debt funds,” adds Ranjit.
Other cities such as Guwahati, Rajkot, Coimbatore, Ranchi and Madurai have witnessed remarkable growth in their AUM. Experts say that the increase in AUM from smaller cities is due to focus of the AMCs in widening the customer base from such locations through IAPs and increasing popularity of SIPs.
Ranchi-based Pradeep Jain of PMPK Wealth Advisors feels that increasing interest of investors to invest in mutual funds through SIPs has helped increase Ranchi’s AUM. “Many people who are not familiar with mutual funds now understand SIPs. They think SIP is altogether a different product. In fact, they have understood the benefits of long-term investments through SIPs. Also, lacklustre performance of other asset classes like fixed income and gold has shifted the focus of investors in equity funds,” says Pradeep.
AUM of Ranchi has increased from Rs.2,623 crore in June 2016 to Rs.4,172 crore in June 2017.
Guwahati jumped to the 18th spot from 25th spot a year back. A Guwahati-based distributor feels that investors prefer mutual funds to other asset classes. “Earlier people associated equity with risk. But many people are now revisiting their asset allocation and taking exposure to equity funds for better returns due to increased awareness about mutual funds through IAPs. In addition, the extensive networks of PSU banks that distribute mutual fund products have helped investors explore mutual funds as an investment option,” he says.
The AUM of Guwahati increased to Rs.7,585 crore from Rs.4,556 crore in June 2016.
AUM by Geography - Consolidated data for MF Industry
Locations |
AUM on Jun-17 |
AUM on Jun-16 |
Difference |
HYDERABAD |
38,495 |
25,958 |
12,510 |
BARODA |
14,601 |
10,217 |
4,384 |
NAGPUR |
8,912 |
6,075 |
2,837 |
GUWAHATI |
7,585 |
4,556 |
3,029 |
RAJKOT |
7,206 |
4,556 |
2,650 |
COIMBATORE |
6,827 |
4,004 |
2,823 |
RANCHI |
4,172 |
2,623 |
1,549 |
MADURAI |
3,224 |
1,795 |
1,429 |
Source: AMFI