Mumbai: The number of retail accounts in the MF industry from smaller towns and cities have surpassed that of top cities as the positive momentum in the equity markets and aggressive campaigns undertaken by fund houses have managed to attract a large number of investors from tier II and tier III cities. The total number of retail folios from smaller towns and cities stood at 2.20 crore as compared to 2.05 crore retail folios from top 15 cities in India.
“The boom in the equity markets and higher incentives provided to mutual fund distributors for their activities in beyond 15 cities have contributed to this sharp addition of clients from smaller cities,” said Surajit Misra, executive vice-president and national head, mutual funds at Bajaj Capital. According to him, most of the incremental flow of funds from retail investors from smaller towns and cities are coming through SIP.
“During the recent correction in the equity markets, the fund houses had anticipated widespread redemptions from investors. However, to everyone’s surprise, investors took the opportunity to make fresh investment in the equity markets,” added Mr Misra.
According to data available with Association of Mutual Finds in India (AMFI), assets under management from B15 locations (beyond top 15 cities) grew from Rs 1.49 lakh crore in May 2014 to Rs2.33 lakh crore in May 2015. The rate of growth in assets for B15 locations was 56.36 per cent as compared to 24 per cent for the industry as a whole. The B15 locations have a better balance of equity and non-equity assets. Nearly 44 per cent of the assets from B15 locations are in equity schemes, up from 42 per cent in May 2014.
