The Rise of B15
In the last few years, mutual fund investments which were primarily concentrated to top few cities of India is now spreading its wings to other parts of the country too. According to the data by industry body, AMFI, assets base of mutual funds from smaller town also known as B15 cities has increased by 38 per cent on yearly basis. B15 cities are those which are beyond these top 15 cities which include, New Delhi (including NCR) Mumbai (including Thane & Navi Mumbai), Kolkata, Chennai, Bangalore, Ahmedabad, Baroda, Chandigarh, Hyderabad, Jaipur, Kanpur, Lucknow, Panjim, Pune and Surat.
The benign equity market has helped to garner such inflows, however, what also worked is a large amount of investor awareness programme taken by industry to the entire length and breadth of the industry. Besides these other factors that helped the increase is the performance of physical assets. Traditionally, Indians prefer to invest in physical assets such as real estate and gold. Nevertheless, lacklustre performance in these asset class in the last few years has led to the reduction in the attractiveness of these assets. Therefore, we saw people getting attracted towards the mutual fund.
At the end of FY18, total assets base of the mutual funds from beyond top 15 cities of India stood at Rs. 4.27 lakh crore from Rs. 3.09 lakh crore in the previous year. With this, almost one-fifth of the entire asset of mutual fund industry is coming from these cities. An important trend is that most of the investment that comes from smaller cities is in equity. Sixty-two per cent of the total investment is done in equity-related schemes. What is also interesting is that most of the investment done from B15 cities is helped by some advisor or mutual fund distributor as only 21 per cent of the total investment are direct, rest all are regular. In case of T15 cities, the figure is around 46 per cent.
Going forward, we will see the trend to continue and investment from B15 cities will keep on rising on the back of awareness about the mutual fund products.