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
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