SUBSCRIBE NEWSLETTER
Trends Small on AUM but big on equity

Small on AUM but big on equity

Investors in Bihar, Jharkhand and Jammu & Kashmir are increasingly investing in equity funds.
Daya R Feb 17, 2017

An appetite for equity investments seems to have increased across the country.

The latest AMFI study on geographical spread of mutual funds shows that investors are increasingly lapping up equity funds in states like Bihar, Jammu & Kashmir and Jharkhand and union territories such as Andaman and Nicobar Islands.

AMFI data shows that the proportion of equity to overall AAUM in Bihar stood at 71%, which is the highest among other states in percentage terms as on December 2016. Similarly, Jammu & Kashmir and Jharkhand recorded equity AAUM of 67% and 61% of their respective overall AAUM.

Among union territories, Andaman and Nicobar Islands witnessed a contribution of 61% in equity funds.

However, in absolute terms, the contribution of states like Maharashtra and Gujarat are among the highest.

Patna-based IFA Manu Mehrotra attributed this to increased awareness about MF investment through SIPs. “Many investors have started looking at mutual funds as an alternative to earn better returns. Thanks to growing popularity of SIPs in these locations, people who have been investing in FDs and postal savings schemes for a long time; are now investing in mutual funds through SIPs.”

Another reason that Manu has pointed out is predominance of retail investors. “There are hardly any corporate players in these states, and this could be another reason for the ascendency of equity investments,” he says.

Bhilai-based IFA Ashish Mehta feels that declining interest rates of banks FDs has contributed to the growth in equity assets of mutual funds in such locations. “Since bank FDs are no longer offering attractive returns, many people are looking at other avenues to earn better risk adjusted returns and what is better than mutual funds.”

Top 10 states with high equity allocation

State

Equity%

Overall AAUM

Bihar

71%

8900

Jammu and Kashmir

67%

1400

Andaman and Nicobar Islands 

61%

100

Jharkhand

61%

10100

Madhya Pradesh

61%

15000

Uttarakhand

56%

4400

Chhattisgarh

50%

6700

Himachal Pradesh

49%

2300

Punjab

48%

18700

Uttar Pradesh

48%

60000

Source:AMFI

3 Comments
PARTHA BISWAS · 3 months ago
its a eye opener for all of us. people have started changing their savings habit from convensional produt to mf .
Dhanesh Advani · 3 months ago
Its a goos news that people have started investing in MFs schemes,
But i have a concern that they must be aware and educted about risk in equities .
Sharad parashar · 2 months ago
Increasing popularity only indicates good efforts of mutual fund advisor in imparting financial literacy
Wish to stay on top of your game? Get daily tips, ideas and articles to grow your business.
Subscribe to Cafemutual Newsletter.