Making further inroads: Mutual funds on expansion spree in smaller towns

The individual AUM of investors in B-30 surged 27 per cent in FY25, reaching ₹10.8 trn. In comparison, AUM in the top 30 cities (T-30) increased by 21 per cent to ₹30.5 trn during the same period

Mutual fund (MF) growth in towns, beyond the top 30 cities (the B-30), continued in line with the overall growth trend, during 2024-25 (FY25).

 

The share of B-30 in individual MF assets under management (AUM) rose to 26.1 per cent in March 2025 from 25.3 per cent in March 2024.

 

The individual AUM of investors in B-30 surged 27 per cent in FY25, reaching ₹10.8 trillion. In comparison, AUM in the top 30 cities (T-30) increased by 21 per cent to ₹30.5 trillion during the same period.

 

Individual AUM refers to the non-institutional assets being managed by fund houses.

 

MF executives emphasise that B-30 is crucial for increasing MF penetration. 

 

Currently, the industry has only around 54 million MF investors, even though the strong equity market performance in the post-Covid period has led to a record addition of new investors.

 

The rise in online investment platforms, a growing distributor base, and awareness campaigns have enhanced the reach of MFs to a certain extent over the past five years.

 

The growth of investment platforms is reflected in the surge in direct plan AUM.

 

During FY25, direct plans accounted for 23.6 per cent of the total AUM, compared to 21.6 per cent in the previous financial year.

 

Direct plan AUM jumped by 27 per cent in FY25, reaching ₹28 trillion, compared to a 20 per cent increase in regular plan AUM, which stood at ₹38 trillion.