look news india
Ahmedabad: The number of new investors coming from small towns to the mutual fund sector is increasing on a monthly basis. According to a recent study, the mutual fund industry has added 2.3 crore investors (folios) from April to August 2024, of which more than 50% are from small towns.
However, small towns still account for only 19% of the total assets under management (AUM) of the mutual fund industry. This suggests that although more individuals from these areas are participating in investment, the average investment size may still be smaller than in larger urban centres.
As of August 2024, about 54% of all SIP accounts in the mutual fund industry are contributed by small town SIPs. Smaller cities have a larger number of SIP accounts which reflects greater penetration in less urbanized areas. This trend can promote a culture of savings and investment and ultimately contribute to long-term industry growth.
From April to August 2024, the growth rate in SIP accounts in small towns for index funds (18.7%) is higher than any other segment in the industry. Overall, around 79% of SIP accounts in small towns contribute through growth/equity oriented schemes.
With the rise of smartphone apps, direct investment platforms, digital payment systems and industry initiatives, more than 50% of all new investors in small towns invest through direct schemes.
The average ticket size of the retail segment in small towns is around Rs 1.13 lakh while the combined average ticket size of the retail segment for cities is around Rs 2.04 lakh.