Mutual Funds Moving Beyond Top 15 Cities, Says Franklin Templeton Report

The traction for mutual funds, thanks to the dazzling returns in the recent past, have only grown among Indians. With net inflows into the mutual funds weighing in at Rs 1.08 lakh crore in August, the net assets under management in the industry have risen to Rs 66.7 lakh crore.

The booming numbers have a strong story to tell—that of increasing interest in investing. The remarkable increase in investors across the nation is not concentrated just to the metros.

The share of mutual fund investors in below 15 cities have risen significantly in the last four years, according to a Franklin Templeton report.

Small Cities Are Consistent Investors

Mumbai and Delhi continue to hold their place with the most number of investors, accounting for 39% investors as of June 2024.

The contribution of other cities has been on a steady rise since June 2019. The contribution that was 25% in 2019 has grown by 10% in 2024.

While other cities have steadily contributed over 30% of investors since March 2021, Mumbai and Delhi have also contributed over 40% till Dec. 2023. However, the contribution of these metros slipped to 39% in March this year.

The Big, Small City Boom

The assets under management of investors in below 30 cities undeniably outpaced the top growth in the AUM of the top 30 cities in India. The growth of AUM from Dec. 2018 to Aug. 2024 across cities has two different growth trajectories to show.

The top 30 cities by 19% contribution according to the report, grew from an AUM of Rs 20 lakh crore in Dec. 2018 to Rs 54 lakh crore in Aug. 2024. The pace of growth steadily spread through the years, the top cities saw even growth through the years under review.

The growth of below 30 cities had a different tale to tell, with the AUM taking leaps through the years, giving 24% growth during the time frame. Starting with Rs 4 lakh crore AUM in Dec. 2018, the AUM more than doubled by Aug. 2024. The growth in AUM was by the couple crores, spread through the years, reaching the highest in August.

India's Biggest Investors

Telangana, accounting for 63.89% of investors in India, holds its place as the state with the highest average AUM growth.

It is closely followed by Rajasthan with 51.19% growth over the year. Uttar Pradesh, Haryana, and Gujarat also make it to the list with more than 40% growth.

New Delhi and Maharashtra saw the least growth over the year with a little over 30% growth in average AUM.