Outlook Money OLM December 2017 Issue | Page 53

Name: Alamelu Vishwanathan Sundaram Age: 60 Location: Coimbatore Investment Rationale: Building a corpus for post-retirement requirements and grandchildren’s secure future. the share of top five cities—Mumbai, Delhi, Chennai, Bengaluru, and Kolkata—has dipped slightly from 72.42 per cent in January-March 2017 to 71.57 per cent in the subsequent quarter, and further to 71.53 per cent during July-September 2017. Correspondingly, the contribution from the other cities has risen during the period. “We are seeing a strong interest from retail investors in smaller cities. What we are witnessing is a structural change in investors’ mindsets. There is a clear shift away from physical assets and towards financial instruments,” asserts Sundeep Sikka, Executive Director and CEO, Reliance Nippon Life AMC, which has recorded considerable interest from the North-eastern states too. The total AUM from the region shot up nearly 80 per cent to cross `14,905 crore in October 2017 (See: North-east rising) compared to the year ago period. “We continue to see good traction from Upward March B-15 25 T-15 20 15 10 5 0 October 2016 September 2017 Source: Morningstar India Gaining Ground City Mumbai Delhi Bangalore Chennai Kolkata Total Other Cities Source: AMFI Share in AUM (%) Jan-Mar ‘17 Apr-June ‘17 July-Sept ‘17 43.06 14.46 5.74 42.37 14.1 5.66 41 13.8 5.82 4.6 4.83 6.35 4.56 72.42 27.58 4.61 71.57 28.43 4.56 71.53 28.47 Photo:guna amugathum smaller cities. For the period March-September 2017, we witnessed a 40 per cent growth in overall AUM and more than 50 per cent in equity,” adds Manish Mehta, National Head - Sales and Distribution Alliances, Kotak Mutual Fund. However, he believes that the decline in share of larger cities could also be attributed towards the quarter-end redemptions by institutional investors. DeMo the Catalyst? Sikka attributes this trend to multiple factors. “The trend started with Jan Dhan accounts when a large number of people gained access to bank accounts. Next, with demonetisation, money flowed into these accounts,” he notes. Sundaram AMC CEO Sunil Subramaniam concurs with Sikka on demonetisation’s role as a catalyst. “It hurt real estate and gold, besides prompting banks to ease interest rates as they were flush with liquidity. Mutual funds offer much higher returns, attracting more retail investors,” he says. SEBI rules for distribution in B-15 cities have helped as well. “We can now offer attractive incentives to distributors to source new investors from smaller cities. The industry’s ad campaign too has played a role,” suggests Subramaniam. Mutual fund distributors based in such www.outlookmoney.com December 2017 Outlook Money 51