The Indian mutual fund industry is witnessing a significant shift in its investment landscape, with smaller cities emerging as the new growth drivers. While metropolitan centers like Mumbai have traditionally dominated mutual fund investments, a surge in inflows from smaller towns is transforming the industry's geographical reach.
How the cities compare |
| Mumbai's share in the mutual fund industry AUM (Assets under Management) declined from 42% to 27%. AUM is the total market value of assets that financial institutions manage on behalf of investors. |
| Pune's market share increased to 4.04% from 3.70%. |
| Durgapur's MF assets jumped 154% to ₹5,585 crore. |
| Kota's MF assets more than tripled to ₹5,589 crore in the last five years. |
| Alwar in Rajasthan registered a 51% growth in MF assets at ₹2,306 crore. |
| Coimbatore retained 16th place with an AUM of ₹17,699 crore. |
| Madurai and Tiruchirapalli were ranked 57th and 77th with assets of ₹4,639 crore and ₹3,256 crore, respectively. |
| MF assets in Jammu jumped 22% to ₹3,232 crore in one year. |
Mumbai's AUM growth was 10%, reaching ₹12.62 lakh crore, contributing to 27% of the overall industry assets of ₹46.58 lakh crore as of September-end.
The surge in mutual fund investments from smaller cities in India is driven by various factors, transforming the industry.
Factors contributing to surge in mutual fund investments in smaller cities | |
Table of contents [Show] Rising Income and Awareness | Smaller cities show increased disposable income and financial awareness, fueling interest in mutual funds. |
Targeted Outreach and Incentives | Distributors and advisors actively reach smaller cities, organizing workshops. AMFI's B-30 scheme encourages investments. |
Embracing Riskier Assets | Investors in smaller cities are increasingly open to riskier assets, like equity mutual funds. |
Technological Advancements | Widespread smartphone use enables convenient access to mutual fund management, breaking geographical barriers. |
Brand Trust | Established houses leverage brand trust, using initiatives like virtual relationship manager channels. |
Industry Implications | |
Diversified Investor Base | Expansion beyond metros diversifies investor base, reducing reliance on large cities and enhancing resilience. |
Enhanced Market Reach | Penetration into smaller towns broadens the market reach, potentially doubling or tripling the investor base. |
Inclusive Financial Development | Smaller towns' participation promotes financial inclusion, contributing to overall financial development. |
