Smaller Towns Driving 15% Of MF Asset Base

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Smaller Towns Driving 15% Of MF Asset Base
Himali Patel - 21 September 2019

According to the Association of Mutual Funds in India (AMFI) when it comes to contribution from small towns usually described as B30 (beyond 30), 15 per cent of the assets of the MF industry came from this location in August 2019. However, assets from B30 locations have decrease by 2 per cent, from 3.99 lakh crore in July 2019 to 3.92 lakh crore in August 2019. Further as of August 2019, 63 per cent of assets from B30 locations were in equity schemes compared to 64 per cent in July 2019.

When it comes to top 30 (T30) locations, the equity-oriented schemes accounted for 37 per cent in August as compared to 38 per cent witnessed in July 2019. In the year 2017, Sebi had asked the fund houses to re-classify their cities which came into effect from FY 2018. Now Top 15 (T15) and Beyond top 15 (B15) has been changed to T30 and B30, where T30 refers to top 30 geographical locations in India and B30 indicates 30 cities beyond T30.

In the month of August 2019, the mutual fund industry’s total Average Assets Under Management (AAUM) came in at Rs. 25.64 lakh crore as compared to Rs. 25.81 lakh crore in July 2019. It is important to note that B30 and B100 cities are experiencing breakout of growth which places the mutual fund industry for the better future growth with the boost of regulatory enablers.

“The limited penetration of asset management products across Indian households (our estimates indicate a current penetration of ~7 per cent), low geographic penetration in B30 cities where nearly 90 per cent of Indian households are located and low levels of investor awareness — all indicate the significant growth potential for the asset management industry in the coming years,” highlighted a report of BCG in association with AMFI in August 2019.

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