CashNews.co
Recent discussions on MF Corner with Sanchita Mukherji, Managing Partner of Talk the Walk, and Kalpesh Ashar, CFP-RIA at Full Circle Fin Planners & Advisors, highlighted the rising contributions from B-30 cities and the strategies needed to enhance their participation.
Traditionally, T-30 cities have dominated MF investments, accounting for about 75-80% of total assets under management (AUM).
These cities boast mature financial markets and higher financial literacy levels, making them a stronghold for MF investments.
As of September 2024, most MF assets still originate from these metropolitan areas.
B-30 cities, ranked 31st and beyond in terms of MF investments, are mid-sized locations with limited financial infrastructure.
However, their contribution to the MF sector is growing rapidly.
Mukherji noted that AUM from B-30 cities is increasing annually in double digits, outpacing T-30 cities, thanks to rising financial literacy and improved distribution channels.
The Securities and Exchange Board of India (SEBI) is actively encouraging mutual fund houses to promote their schemes in B-30 cities to enhance penetration. As a result, these areas are showing growth potential, with a lower base of existing investors, making them prime for expansion as awareness of financial products increases.
Kalpesh Ashar shared key figures reflecting this growth.
In September 2024, B-30 cities accounted for 19% of the total mutual fund industry assets, up from the previous year.
AUM from these regions surged from ₹8.38 lakh crore in September 2023 to ₹12.59 lakh crore by August 2024, indicating a rising preference for equity-based mutual fund schemes.
From August to September 2024, B-30 assets grew from ₹12.16 lakh crore to ₹12.59 lakh crore.
This trend reflects increasing awareness and interest in mutual funds among investors in smaller cities.
Despite this progress, Mukherji emphasised that more work is needed to enhance financial literacy and awareness in B-30 cities.
With a smaller investor base compared to T-30 cities, there is significant potential for exponential growth in these areas.
Both Mukherji and Ashar concurred that ongoing efforts to educate and engage investors in smaller cities are crucial for driving future growth in mutual fund investments, ensuring that B-30 cities play a larger role in the industry’s success.
For more, watch the accompanying video