Small towns rising!
The Association of Mutual Funds in India (AMFI), the apex body of asset management companies (AMCs) in India, has released data on mutual funds in India for the month of November 2017. Among the plethora of data made available by AMFI, the most crucial data pertains to the spectacular growth in assets under management (AUMs) of mutual funds from B15 locations, which are small towns beyond top 15 (T15) cities in India. According to AMFI, the AUMs from B15 locations have increased from Rs 2.81 lakh crore in November-end 2016 to Rs 4.10 lakh crore in November –end 2017, recording a whopping increase of almost 46% within a period of just one year.
It looks like AMFI’s aggressive campaign “Mutual Funds Sahi Hai” over the last one year has really worked wonders and drawn small town investors into the mutual fund fold. That apart, the consistent returns delivered by mutual funds have also attracted new investors to mutual funds. Also, the decline in interest rates on bank fixed deposits and company deposits since demonetisation in November 2016 have made these investments unattractive for the investors, who might have been attracted by higher returns offered by mutual funds.
The T15 cities include New Delhi (including NCR), Mumbai (including Thane and Navi Mumbai), Kolkata, Chennai, Bengaluru, Ahmedabad, Vadodara, Hyderabad, Chandigarh, Jaipur, Kanpur, Lucknow, Pune, Panjim and Surat, The B15 locations include all other cities and towns excluding the above T15 cities.
The growth in AUMs from B15 cities has been impressive, but much more remains to be achieved, as out of the total AUMs of more than Rs 22 lakh crore mutual fund industry, only Rs 4.10 lakh crore came from B15 locations, while T15 cities contributed the major chunk of almost Rs 18 lakh crore. Of course, most of the AUMs from T15 cities comprised of institutional investments.
From the above, it is heartening to know that investors from B15 cities are taking to equity investments in a big way, but there is tremendous potential in B15 cities and towns that still remains to be tapped.