Contribution of small towns — known as beyond the top 15 cities (B15) — to mutual funds’ asset base in India has surged 13.5 per cent to Rs 2.14 lakh crore in the first nine months of the current fiscal.
Mutual funds’ assets under management (AUM) from B15 grew from Rs 1,89,014 crore in March 31, 2015 to Rs 2,14,528 crore at the end of December, according to the Association of Mutual Funds of India (AMFI) data.
Despite marked volatility in the broader financial and stock markets, contribution from B15 cities has increased in the overall industry’s AUM.
A major portion of the products sold within this fast growing pocket of the industry are equity-linked unlike the top 15 space, where institutional dominance tilts the balance towards fixed income products, Reliance Capital Asset Management Company (RCAM) CEO Sundeep Sikka said.
With Rs 30,641 crore under management, Reliance MF had a 14.3 per cent share of the B-15 mutual fund market in December 2015, closely followed by UTI MF with a 13.9 per cent market share and Rs 29,762 crore worth of assets base.
Commenting on the numbers, Sikka said: “RCA M occupies a niche position within this space with a robust distribution network and dedicated investor education programmes.”
“We look forward to further capitalising on the strengths and keep bringing compelling investment opportunities to individual investors in B-15 cities,” he added.
Among the top five mutual fund houses, Birla Sun Life MF has seen the highest growth in assets base from B15 cities, while in absolute terms Reliance MF has bagged the top slot.
Birla Sun Life MF’s AUM from B15 locations jumped by over 22 per cent to Rs 16,599 crore. This was followed by ICICI MF, which saw a growth of about 18 per cent in its assets base from B15 cities to Rs 24,700 crore, Reliance MF (about 12 per cent to Rs 30,641 crore), HDFC MF (8.3 per cent to Rs 26,737 crore) and UTI MF (4 per cent to Rs 29,762 crore).
B15 cities are those which are beyond these top 15 cities — New Delhi (including NCR), Mumbai (including Thane & Navi Mumbai), Kolkata, Chennai, Bengaluru, Ahmedabad, Baroda, Chandigarh, Hyderabad, Jaipur, Kanpur, Lucknow, Panjim, Pune and Surat.
To increase penetration and popularise MF products in rural areas, capital market regulator SEBI had in 2012 mandated fund houses to go to ‘B15’ cities.
Currently, all the mutual fund houses manage assets worth over Rs 12.74 lakh crore.