The participation of investors from small towns in the stock market has grown rapidly in recent months as the mutual fund industry has added 2.3 crore investor folios from April to August 2024, more than 50 percent of which are from such areas, the report said. said on Friday.
“The number of new investors from small towns has been increasing every month. Such trends can encourage a culture of saving and investing, ultimately contributing to the long-term growth of the industry,” said a report by Zerodha Fund House.
The report further stated that small towns still account for only 19 percent of assets under management (AUM) in the mutual fund industry. It shows that although many people from these regions participate in investment, but the average size of investment may be lower compared to those from urban areas.
These small cities and towns are classified as B-30 cities (above the top 30 cities) by the Association of Mutual Funds of India (AMFI). As of August 2024, about 54 percent of all SIP accounts in the mutual fund industry are dedicated to SIPs from small towns. Smaller cities with larger number of SIP accounts show higher penetration in smaller urban areas.
From April to August 2024, the growth rate in SIP accounts in small cities of index funds (18.7 percent) is higher than the growth rate of any other category in the industry.
Overall, about 79 percent of SIP accounts from small towns offer growth/equity oriented plans.
Vishal Jain, CEO of Zerodha Fund House said: “I strongly believe that simple, transparent and affordable investment products will help small individual investors build a better financial future. Index-based funds reflect all these qualities and I am happy to see their growing trend. in small towns and villages.”
“The average ticket size of the small town retail segment is around Rs 1.13 lakh, while the combined average ticket size of the urban retail segment (T30+B30) is around Rs 2.04 lakh,” he added.
