A recent study by Zerodha fund house reveals that the number of new investors coming from smaller cities has been rising on a monthly basis. In the study quoting AMFI Mutual Fund Industry data, the mutual fund industry has added 2.3 Cr investors (folios) from Apr to Aug 2024. More than 50% of them come from smaller or B-30 (Beyond the top 30 cities) cities, says the study.
However, smaller cities still account for only 19% of the overall Assets Under Management (AUM) of the mutual fund industry as of Aug 2024.
---Advertisement---
Zerodha Study: Factors That May Have Contributed To This Trend In Smaller Cities
Contribution from live SIP Accounts: About 54% of all the SIP accounts in the mutual fund industry is contributed by SIPs from smaller cities as of August 2024.
---Advertisement---
From Apr to Aug 2024, the growth rate in the SIP accounts in smaller cities for Index Funds (18.7%) is higher than the growth rate of any other category in the industry, says Zerodha. Altogether, about 79% of the SIP accounts from smaller cities are contributed by growth/equity oriented schemes.
Access to Direct Plans: The rise of smartphone apps, direct investment platforms, digital payment systems, and industry initiatives has led to more than 50% of all the new investors in smaller towns to invest through direct plans, says the study by Zerodha.
The average ticket size of the retail segment in B-30 cities is about Rs 1.13 lakh. The combined average ticket size of the retail segment for (T30+B30) cities is about Rs 2.04 lakh.
The growth in the number of mutual fund investors from smaller towns may indicate a shift towards financial inclusion and investment awareness in these regions, said the Zerodha study in its conclusion.
Also Read: Richest Among Richest: Who Are The Top 10 Richest People In The World?