MF investments from small towns rise 41% to Rs 4.36 trillion in Feb: Icra

Smaller towns contributed Rs 4.36 trillion to assets under management (AUM) of the mutual fund industry at the end of February 2018, over 41 per cent higher than a year-ago period, said a report.

According to rating agency ICRA, AUM of mutual funds from B15 cities (beyond top 15 cities) stood at Rs 3.08 trillion at end of February 2017.

"In the last 12 months, B15 towns have witnessed AUM growth of 41.7 per cent or Rs 1.28 trillion to reach Rs 4.36 trillion at the end of February 2018 compared with Rs 3.08 trillion in the year-ago period," the report said.

In February, the share of direct plans in B15 towns stood at 20.4 per cent against 45.6 per cent in top 15 cities.

Overall, the country saw the total folio count rise by 2.3 per cent to nearly Rs 70 , at the end of February compared with the previous month.

"The mutual fund industry added about 15.72 lakh (1.57 million) new folios in February out of which 13.65 lakh (1.36 million) were in the equity category including ELSS (Equity Linked Savings Schemes (ELSSs)," the report further said.

"About 1,80,000 new folios were added to the balanced category in the month," it added.

AUM of the Indian mutual fund industry came in at Rs 22.20 trillion in February, down from Rs 22.41 trillion in January.

ICRA also noted that despite the stock markets declining, net inflows into equity mutual fund schemes continued to remain strong.

Equity funds (including ELSS) witnessed monthly net inflows of Rs 162.68 billion, up 5.7 per cent month-on-month and more than 150 per cent year-on-year, during February.

"The increase was mainly driven by sustained inflows through Systematic Investment Plans (SIPs)," ICRA noted.

Meanwhile, net inflows in the balanced category came in at a one-year low of Rs 5,026 crore (50.26 billion) in February, possibly owing to the government proposal of imposing dividend distribution tax in the budget 2018-19, ICRA said.