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Investors pump ₹10,585 crore into equity mutual funds in July
Total inflow has reached to over ₹43,300 crore in equities during the current financial year, according to Amfi
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According to Amfi data, equity and equity-linked saving schemes saw an inflow of ₹12,409 crore in April, ₹12,070 crore in May, ₹8,237 crore in June and ₹10,585 crore in July.

New Delhi: Investors pumped a staggering ₹10,585 crore in equity mutual funds in July, mainly driven by strong corporate earnings and near normal monsoon. With this, total inflow has reached to over ₹43,300 crore in equities during the current financial year (April-July), according to the data from the Association of Mutual Funds in India (Amfi).

Strong inflow pushed the asset base of equity mutual funds by more than 10% to ₹8.3 lakh crore by July-end from ₹7.5 lakh crore at end-March.

According to Amfi data, equity and equity-linked saving schemes saw an inflow of ₹12,409 crore in April, ₹12,070 crore in May, ₹8,237 crore in June and ₹10,585 crore in July. “Strong earnings season and near normal monsoon have buoyed the sentiments in near term. However, in last few years we are seeing that the average Indian investors are now far more financially literate and mature. They realize that India is a strong structural story and participating for the long term as reflected by the growing SIP book.

Overall, the industry saw a pull out of funds to the tune of over ₹32,000 crore in July.

AMFI's new campaign to focus on debt investment benefits
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The Association of Mutual Funds of India (AMFI) is all set to come out with its next campaign that will focus on the benefits of investing in debt funds, following the popular 'Mutual Funds Sahi Hai' drive. "We are now planning the second phase of mutual funds campaign on debt investment benefits. It is expected to be aired from the third week of September," AMFI Chief Executive N S Venkatesh told. Venkatesh said at present, debt fund investment by retail investors constitute just 10 per cent, while the rest is equity, and this ratio is not prudent asset allocation.

He said in the 2018-19 fiscal, AMFI will spend Rs 150-175 crore to promote mutual funds investments. In the last fiscal, it had spent Rs 200 crore for the purpose.

"There is no plan to pull-out the 'Mutual Funds Sahi Hai' campaign. Instead, it will become the master campaign brand and sectoral products will also come under it," he said.

Regulator SEBI has repeatedly stressed that risks associated with mutual fund investments should be clearly spelt out. It has also called for rationalisation in the Total Expense Ratio (TER) of the MF industry. "There is a need to have more competition in the sector and there is a need for TER rationalisation. We are looking into this," SEBI chief Ajay Tyagi had recently said.

The concept of TER started in the late 90s when assets under management (AUM) was Rs 50,000 crore and today it is Rs 23 lakh crore. "Therefore, we are examining the need for rationalisation," he had said.

Meanwhile, Venkatesh said that only two crore PAN card holders are active investors in mutual funds out of a total of 29 crore card holders, indicative of the potential the industry holds.

He hoped that the MF sector will maintain robust growth and inflows will see a double-digit rise in the current fiscal.

A handful of States account for 70% of MF assets
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Maharashtra, Delhi, Karnataka, Gujarat, Bengal top the list; capital cities do the heavy-lifting

BL RESEARCH BUREAU

The mutual fund industry (MF) is on a roll with assets under management (AUM) doubling from about ₹11 lakh-crore in July 2014 to nearly ₹24 lakh-crore in July 2018. But what has not really changed much is the continued dominance of a few States and cities in the total pie.

Of the 36 States and Union Territories (UTs), just five — Maharashtra, Delhi, Karnataka, Gujarat and West Bengal — account for more than 70 per cent of the total AUM of the MF industry as of July 2018. In July 2014, their share had been about 73 per cent.

Add three more — Haryana, Tamil Nadu and Uttar Pradesh — to the equation, and the top eight States account for close to 84 per cent of the AUM as of July 2018, not very different from their nearly 85 per cent share in July 2014.

In sharp contrast, the bottom 20 contributing States and UTs — including the North-Eastern States, Jammu & Kashmir, Bihar, Chhattisgarh, Uttarakhand, Himachal Pradesh and most UTs — account for about 3.5 per cent of the July 2018 AUM.

Big-city dominance

Maharashtra remains the top contributor to the industry’s AUM with a close to 42 per cent share in July 2018, compared with about 46 per cent in July 2014. The dip in its share has largely been re-distributed among the other top seven contributing States. The high concentration of AUM in the top eight States flows essentially from the heavy-lifting done by their key cities. For instance, financial capital Mumbai accounts for nearly a third of the total AUM as of June 2018.

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This, combined with Pune’s over 4 per cent share, propels Maharashtra to pole position.

Delhi-NCR has a nearly 16 per cent share in the industry’s AUM. Karnataka’s position in the top three States with an about 7 per cent share is primarily driven by software hub Bengaluru (6 per cent).

Similarly, Ahmedabad, Kolkata and Chennai account for the chunk of the share of Gujarat, West Bengal and Tamil Nadu respectively.

The industry had taken a top-down approach while setting up the asset management business in India and rightfully.

In effect, the top seven cities and surrounding areas account for nearly 70 per cent of the total AUM of ₹23.6 lakh crore as of June 2018.

Small-city share rising

Meanwhile, aided by awareness campaigns and more incentives to distributors, the share of assets from the beyond-the-top-15 (B15) cities in the total AUM pie has also gone up. It increased from 16 per cent as of March 2014 to 19 per cent as of March 2018, shows the AMFI CRISIL Factbook 2018.

But the steady share (84-85 per cent) of the top eight States over the past four years, despite a dip in contribution from the larger cities, suggests that these States together have increased their weights among their smaller cities.

Overall, Maharashtra, with about ₹10 lakh-crore as of July 2018, has the largest AUM among States and UTs, while Lakshadweep with ₹7 crore has the smallest. New Delhi tops the per capita investment in mutual funds, with about ₹1.4 lakh, while Manipur ranks at the bottom with ₹1,460.


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