Equity, hybrid funds dominate small town mutual fund flows: Icra Analytics

Mutual fund investments in areas outside the top 30 cities (referred to as B-30) are predominantly allocated to equity and hybrid funds. According to an analysis by Icra Analytics, 76 per cent of B-30 assets are invested in equity funds, while 9 per cent are in hybrid schemes. Debt funds account for only 12 per cent of the total assets under management (AUM) in these regions.

 

In contrast, the investment pattern in the top 30 cities (T-30) differs significantly due to the presence of institutional investors. These investors hold a substantial share of T-30 AUM, resulting in a higher debt fund allocation of 31 per cent. As of May 2025, equity funds accounted for 49 per cent of T-30 AUM, according to data from the Association of Mutual Funds in India (Amfi). 

 

Despite the higher growth rate of B-30, the presence of institutional investors continues to skew the overall AUM share towards T-30. In May 2025, nearly 18 per cent of the mutual fund industry's assets originated from B-30 locations. Assets from B-30 locations increased from 12.66 trillion in April 2025 to 13.28 trillion in May 2025, marking a 5 per cent month-over-month increase. On a yearly basis, this figure rose by 27 per cent. Meanwhile, assets from T-30 locations grew by 22 per cent year-over-year in May 2025.