Top 10 fund houses account for 80% of B15 assets

B15 assets continue to grow. The latest AMFI data shows that B15 assets have increased from Rs. 2.18 lakh crore in March 2016 to Rs. 3.09 lakh crore in March 2017, a growth of 41%. This indicates 17% of the assets of the MF industry came from B15 locations in FY 2016-17.

Interestingly, a majority of these assets are with the top 10 fund houses. Cafemutual’s latest study on geographical distribution of quarterly AUM shows that top 10 fund houses account for 80% of B15 assets. The AUM of the top 10 fund houses stood at Rs. 2.42 lakh crore as on March, 2017.

HDFC Mutual Fund has the highest AUM of Rs.48,619 crore from B15 cities. Nearly, 22% of its total AUM came from B15 cities.

In terms of percentage, UTI Mutual Fund has highest proportion of B15 assets. The study shows that 34% of its assets came from B15 location with AUM of Rs.43,056 crore. A strong distribution channel and deeper penetration in smaller cities has helped it grow over the years. UTI has over 130 branches in B15 cities and has over 300 business development agents (BDAs) across India.

Similarly, Reliance Mutual Fund and SBI saw 20% of their overall AUM coming from B15 locations. Himanshu Vyapak, Deputy CEO, Reliance Mutual Fund said, “The consistent focus to grow business in B15 cities and effective efforts to popularise simple products amongst the investors in such locations has helped us extend our footprint.” Reliance MF has a presence in about 150 locations across India.

Citing the reasons for its successful foray in B15 cities, DP Singh, Chief Marketing Officer (CMO), SBI MF said, “SBI is a renowned and trusted brand in India. Our omnipresence and strong relationship with the distribution partners helped us improve penetration in B15 locations. Currently, we have a presence in about 162 locations across the country and are getting business from across 3,000 centres.”

Among other AMCs, fund houses like Principal and Invesco too have a decent percentage of their assets coming in from B15 cities. Both these AMCs have more than 24% of their AUM coming from B15 cities.

A senior official from Invesco MF attributes this growth to their presence in over 60 B15 locations for the past 9 years. “We have been doing business in B15 locations with the help of our in-house distributors. We will continue to focus on this segment as B15 investors usually invest in equity funds.”

Bhilai-based Zian Khan of Omega Financial said that investors in B15 cities have started investing in mutual funds due to lacklustre performance of other asset classes. “Retail investors in B15 locations are not finding it attractive to invest their money in bank FDs as real rate of returns offered by banks are lower than the inflation. At the same time, investor awareness programs have started yielding desired results in these locations,” he added.

Source: Company Disclosure