Smaller towns see higher growth in MF investors

Mumbai: The assets under management (AUM) of the mutual fund industry have seen a relatively higher growth from smaller towns and cities in FY18 primarily driven by equity products.

This according to fund managers suggests that a higher proportion of investors from smaller cities prefer equity to other asset classes.

According to the data available with the industry body AMFI, the assets from B15 locations (beyond top 15 cities) have increased from Rs 3.09 lakh crore in March 2017 to Rs 4.27 lakh crore in March 2018, posting a growth of 38 per cent when compared to 19 per cent growth in top 15 cities from Rs 15.48 lakh crore to Rs 18.44 lakh crore during the same period.

The data shows that individuals interest in equities have increased over the last one year as 62 per cent of the assets from B15 locations was in equity schemes as at the end of March 2018 as compared to 53 per cent in the same period last year.

Similarly, the percentage of assets held by individual investors from B15 locations has increased from 25.48 per cent to 28.23 per cent during the corresponding period.     

One of the main factors that are driving individuals towards equities according to experts is the fact that the expected returns from others asset classes like gold and real estate is not that attractive as compared to equity markets.

Moreover, the awareness campaigns undertaken by fund houses over the last few years amidst a buoyant secondary market has also managed to attract a significant number of first time investors to the equity markets.

As of March 2018, the total AuM of the mutual fund industry stood at Rs 21.36 lakh crore with equity schemes accounting for 35 per cent and debt schemes constituting 37 per cent. Individual investors held Rs 11.66 lakh crore in mutual fund schemes out of which Rs 7.92 lakh crore went into equity funds.