Principal, Axis, HDFC, SBI, Canara Robeco and Union KBC have over 16% of their AUM coming from B-15 cities.
Bank sponsored AMCs like Principal PNB, Axis, HDFC, SBI, Canara Robeco, Union KBC, ICICI Prudential, and IDBI are gaining traction in B-15 cities.
These AMCs have a sizeable proportion of their AUM coming from small towns, shows an analysis of geographical concentration of AMCs AAUM in B-15 cities done by Cafemutual.
Among such fund houses, Principal PNB Mutual Fund which is promoted by Punjab National Bank and Vijaya Bank has the highest proportion of AUM coming from B-15 cities. Out of Rs. 4,754 crore AUM managed by Principal, 23% comes from B-15 cities.
Similarly, Axis, HDFC, Canara Robeco, SBI and Union KBC have 21%, 20%, 20%, 18% and 17% of their AUM coming from B-15 cities respectively. Karan Datta, Chief Business Officer, Axis MF said, “In the B-15 category, we have received good response mainly from the west and the east. Our brand, product mix and performance have helped us.”
Other such AMCs like HSBC, IDBI, Baroda Pioneer and ICICI Prudential have over 10% of their AUM coming from small cities.
P Jaideep, President Head – Retail Sales & Marketing, Union KBC Mutual Fund says that wide network of public sector banks has helped these AMCs expand their footprint. “Public sector banks have a good presence in small cities. Also, banks enjoy trust and these banks act as key financial advisors for people living in small cities and town.”
Fund officials expect that over a period of time the industry would get decent flows from smaller towns. “As of now, the average ticket size from these cities is very low but we are hopeful that we will get healthy business from these cities once investors have confidence in mutual funds,” says a senior official from a bank sponsored fund house.
AUM concentration of bank sponsored fund houses in B-15 cites
|
Bank sponsored fund houses |
% of AUM in B-15 cities as on September 14 |
|
Principal |
23 |
|
Axis |
21 |
|
HDFC |
20 |
|
Canara Robeco |
20 |
|
SBI |
18 |
|
Union KBC |
16 |
|
HSBC |
13 |
|
IDBI |
11 |
|
Baroda Pioneer |
11 |
|
ICICI Prudential |
10 |
Source: Cafemutual study
Overall, UTI Mutual Fund has the highest proportion of its AUM coming from B-15 cities. Of the Rs. 83,250 crore AUM managed by UTI, 35% comes from B-15 cities. Other players like Religare MF, Reliance and Franklin Templeton have also received healthy investments from the hinterland.
The analysis was done on the basis of AMCs quarterly disclosure of AUM as on September 2014.
SEBI has allowed AMCs to charge higher expense ratio on assets sourced from beyond the top 15 cities as a result of which fund houses have hiked the commission structure for applications received from these towns.
