B-30 mutual fund assets outpace metros again, but growth gap narrows

Individual investor AUM in smaller towns rose 5.2% in H1 2026 against 4.5% in top-30 cities

The growth in mutual fund (MF) holdings of individual investors from smaller towns continued to outpace that of their counterparts in the country’s top cities during the first half of 2026, although the lead narrowed sharply amid volatility in the equity markets.

 

Industry data accessed by Business Standard shows that individual assets under management (AUM) from beyond the top 30 (B30) cities rose 5.2 per cent in the first six months of 2026 to ~14.47 trillion. In comparison, individual investor AUM in the top 30 (T30) cities increased 4.5 per cent to ~37.8 trillion.

 

The trend extends a multi-year pattern of stronger growth in smaller towns, though the margin has narrowed considerably. In 2025, B30 individual assets expanded 25.7 per cent, well ahead of the 15.9 per cent growth recorded in T30 markets.

 

The continued outperformance has also nudged up the B30 share of individual investor assets to 27.7 per cent from 27.6 per cent at the end of 2025. The share has steadily risen from 25.2 per cent in 2022, reflecting the industry’s deepening reach beyond large urban centres.

 

“B30 regions continue to lead in individual MF AUM growth in 2026, albeit at a slower pace, because the underlying drivers remain structural rather than market-driven. Investors in semi-urban and rural markets are increasingly investing through disciplined systematic investment plans (SIPs), which reduce the impact of short-term volatility and encourage long-term wealth creation,” said Aditya Agarwal, cofounder of Wealthy.in.

 

The latest numbers come despite a challenging period for retail participation. The market correction earlier this year led to a decline in SIP accounts, with the impact most pronounced among do-it-yourself investors in smaller towns. Direct-plan B30 SIP accounts fell by more than 350,000 during March and April, while other investor segments remained relatively stable.

 

Even so, B30 markets have continued to gain importance for the MF industry. Earlier this year, investors from B30 cities overtook their metropolitan counterparts in terms of individual folio share for the first time. B30 investors have also registered faster growth across key metrics in recent years, including SIP participation, underscoring the structural broadening of the industry’s retail investor base.

 

“Financialisation of savings in smaller towns is still in its early innings. This trend is clearly visible in SIP numbers, which continue to grow strongly in these cities. Investors are increasingly shifting from fixed-income products to equities. Distribution and digital penetration have expanded rapidly in these cities, making transactions easier and improving investor awareness,” said Ankur Punj, managing director and business head, Equirus Wealth.

 

“While market volatility has moderated the pace of AUM expansion, continued financialisation of household savings and consistent SIP inflows indicate that semi-urban and rural investors remain committed to long-term investing, making B30 markets the key growth engine for India’s MF industry,” said Agarwal.