DNA Money Edit: Small towns sparkle in MF investment

Mutual funds’ assets under management (AUM) grew at a healthy 29.13%  at Rs 20.40 lakh crore in September, up from Rs 15.8 lakh cror ea year ago, with equity and balanced funds accounting for most of the inflows.

As per Association of Mutual Funds in India (Amfi), the industry receives about Rs 5,000 crore every month through systematic investment plans (SIPs), a favourite route of retail investors, thanks to the freedom it gives to them to invest in small amounts periodically.

Interestingly, 15 smaller towns in the country (beyond top 15 cities, or call them B15) accounted for 17.7% of the assets under management (AUM) of the mutual fund industry, comprising 42 players, by September-end.

In the last 12 months, B15 towns have witnessed AUM growth of 38.5% (Rs 1.05 lakh crore) to reach Rs 3.79 lakh crore by September-end.

There is a rapid rise in the number of new folios as well as increasing share of assets from smaller cities, which now account for 18% of the overall assets base.

Surely, the efforts by the stock market regulator Securities and Exchange Board of India (Sebi) and asset management companies to increase MF penetration in smaller cities, have borne fruit.