Investors from eastern region of the country such as West Bengal, Odisha and Assam have a better balance of equity and debt assets, shows CAMS data.
The data shows that investors belonging to east India have 47% equity exposure in their total MF investments.
Of the total 1.53 lakh crore AUM of east India in mutual funds, investors hold Rs.72,702 crore in equity funds. The data shows that the equity AUM from these locations has increased by 30% in just six months i.e. from January to June 2017.
This data captures 94% of total industry AUM.
Kolkata-based Malhar Majumder of Positive Vibes Consulting and Advisory attributes this to higher participation of retail investors in this region. "Since majority of investors in these locations are retail investors, the allocation to equity is higher compared to other regions. Retail investors prefer investing in equity funds to earn better returns over the long term," said Malhar.
Seconding Malhar’s view, Sudhansu Mohapatra of Shubham Capital, Bhubaneswar said, "Most of our investors are retail investors who prefer investing in equity funds through SIP. In addition, the lacklustre performance of physical assets and unattractive FD returns has helped the industry attract inflows in equity funds particularly from the eastern belt.”
South India followed east India in terms of having a better balance between equity and debt allocation. Of the total AUM of Rs.3 lakh crore, investors from such locations have invested Rs.1.34 lakh crore in equity funds, i.e. 45% of total assets.
Chennai-based A.K. Narayan of AK Narayan Associates says that increasing awareness about mutual funds has helped retail investors understand the importance of equity investments. “Thanks to investor awareness programs, many investors who used to invest in real estate and gold have been started putting their money in equity funds,” says A.K. Narayan, independent financial consultant.
However, in absolute terms, west India still tops the equity AUM league with assets of Rs.3.76 lakh crore. However, its equity allocation as a part of its overall AUM stood at 35%, the lowest of all the regions. The total AUM of west India stood at Rs.10.77 lakh crore.
Similarly, equity AUM of north India stood at Rs.1.51 lakh crore which is 38% of the total AUM of Rs.4 lakh crore.
Overall, the industry maintains 38% of its total assets in equity funds.
