UTI, Principal and Axis have the highest percentage of B 15 AUM

With 35% and 23% of their AUM coming from B-15 cities, UTI and Principal have the highest percentage of assets coming from B-15 cities.

SEBI’s efforts to increase the penetration of mutual funds seems to be yielding the desired results as many fund houses have seen a growth in their assets coming from smaller towns.

UTI Mutual Fund, Principal Mutual Fund and Axis Mutual Fund have the highest proportion (in percentage terms) of their AUMs coming from B-15 cities, shows an analysis of geographical concentration of AMCs AAUM in B-15 cities done by Cafemutual.

Out of the Rs.83,250 crore AUM managed by UTI, 35% comes from B-15 cities. A senior official from UTI MF attributed this success to their long established presence, strong distribution channel and deeper penetration in smaller cities. UTI has over 150 branches in B-15 cities and has over 400 Business Development Agents (BDAs) across India, claims the official.

UTI is followed by PrincipaI Mutual Fund which is promoted by Punjab National Bank and Vijaya Bank. Out of Rs.4,754 crore AUM managed by Principal, 23% comes from B-15 cities. Similarly, Axis has 21% of its AUM coming from B-15 cities. “Such fund houses leverage their wide banking network. A bank sponsor may tend to promote more of its own schemes. Hence, AMCs having banks as promoters have an edge over others,” said a senior official of mid-sized foreign AMC.

India’s largest fund house by assets, HDFC boasts of 20% AUM concentration in B-15 towns, followed closely by Reliance at 20%.

Among the large fund houses, SBI and Tata have 17% and 16% of their AUM coming from B-15 cities respectively. Similarly, Franklin Templeton, Birla Sun Life and ICICI Prudential MF have 14%, 14% and 10% AUM concentration in B-15 cities, respectively.

Nilesh Sathe, CEO of LIC Nomura MF said, “Among the B15 cities, we received good response from Kanpur, Raipur and Ranchi. We received almost 2500 SIPs this year from B15 cities. Investor awareness initiatives are also helping us strengthen our presence in smaller towns.” LIC Nomura has 14% of AUM concentration in B-15 cities.

Among the emerging AMCs, Quantum and Mirae had 19% and 18% of their AUM coming from B-15 cities, respectively.

The analysis was done on the basis of AMCs quarterly disclosure of AAUM as on September 2014.

SEBI has permitted AMCs to charge an additional expense ratio of 30 bps for garnering funds from B-15 cities. Fund houses have also hiked the commission structure for application received from these towns.

AUM concentration in B-15 cities