Retail participation in MFs rises from tier-2 cities: AMFI

Retail participation in mutual funds from beyond the top 15 cities in the country has increased remarkably in the past 18 months, due to joint efforts made by the MF houses and stock market regulator SEBI, says AMFI.

The MF industry's assets under management (AUMs) crossed Rs 1,07,000 crore from retail investors living in places beyond the top 15 cities as on October 31.

It was a 33 per cent growth over 18 months.

As on March 31, 2013 the AUM was Rs 65,000 crore, according the Association of Mutual Funds in India.

The AUMs relate to equities, equity-linked saving schemes (ELSS) and the balanced funds which essentially involves retail participation, the industry body said.

"We have crossed the Rs 1 lakh crore mark in AUMs from beyond 15 cities during past 18 months after we started the journey to reach retail equity investors living in 400 centres located in Tier-II and Tier-III cities, beyond the top 15 cities of the country," AMFI chief executive H N Sinor said.

This is a major indication of increased retail participation in equities, he added.

"While we have achieved 20 per cent of overall retail participation, we have also been able to mobilise 10 per cent of overall AUM from 400 centres which are located beyond top 15 cities of the country comprising semi-urban and even rural areas," he said.

After the global slump of 2008, stock market regulator SEBI had come up with guidelines to re-energise the mutual fund industry.

These guidelines had allowed the industry to take additional 30 basis points of already existing expense ratio which could be used to incentivise distributors across slabs to give a push to sales of mutual fund products.