AMFI’s latest data shows that B30 cities account for 17.3% of the overall industry AUM. A rough calculation shows that contribution from these cities totalled Rs.4.02 lakh crore. If we look at asset classification, B30 cities have a higher exposure to equity than debt with 65% of B30 investments being in equities. In comparison, only 36% of the T30 assets are invested in equity schemes.
As SEBI has recently revised definition of cities for additional TER, we could not ascertain the AUM growth in these cities.
In terms of investor category, B30 cities contribute 27% of industry’s individual assets and 7% of institutional assets. In line with expectations, institutional assets are concentrated in T30 cities, with institutional investments accounting for 93% of total AUM contributed by T30 cities. The remaining 7% T30 assets are coming from individual investors.
Talking about the substantial contribution from in B-30 cities Ajit Menon, Chief Business Officer, DHFL Pramerica Asset Managers mentioned that in both the earlier B15 and current B30 cities majority of the contribution comes from retail investors. In addition, last year witnessed higher retail participation in mutual funds as “lower interest rates are prompting investors to search for avenues offering higher return potential. Next is the TINA factor, which refers to ‘there is no alternative’ because other asset classes are not offering commensurate returns. Finally AMFI’s ‘Mutual funds sahi hai campaign’ has helped spread awareness about mutual funds to all corners of the country."
D. P. Singh, ED and CMO, SBI Mutual Fund feels that we should not read too much into these numbers. He believes that the 17.3% contribution from B30 cities is based on historical investments from these cities, as there have been no AUM needle movers in the last few months.
