The mutual fund industry has attracted 17,376 new distributors in just one year, shows the latest data from Association of Mutual Funds in India, or, AMFI.
Interestingly, 52% of them or 9,090 joined from the B15 cities, indicating a revival of interest from smaller towns. That said, the highest new AMFI Registration Number, or, ARN, registrations continue to come from Maharashtra. In December 2017, 33.74% new ARN licenses were from Maharashtra, followed by Gujarat (8.71%), Tamil Nadu (7.13%) and Uttar Pradesh (7.11%).
Smaller towns gaining traction
While a large pool of new talent continues to come from Maharashtra, encouragingly, other states are catching up. For instance, new distributors joining from states like Gujarat, Uttar Pradesh, West Bengal, Rajasthan and Madhya Pradesh is on the rise. The share of new ARN registrations from Maharashtra has correspondingly fallen from 37.60% in December 2016 to 33.74% in December 2017.
Consequently, the pool of distributors from B15 cities is more than that of top 15 locations, or T15. Of the one lakh registered distributors with AMFI as on December 2017, 51% or 51,547 were from B15 cities. This data excludes distributor’s employees holding employee unique identity number, or, EUIN.
Inflows from B15 are rising
The rising interest from small towns bodes well for the market regulator’s vision to increase mutual fund penetration in the hinterland. In 2012, the regulator had announced a special incentive (0.30% higher expense) for fund companies to reach out to investors in small towns, subject to certain conditions. Also, fund houses were asked to invest two basis points of their assets in generating mutual fund awareness. This push seems to have worked its magic. Assets from B15 locations have increased from Rs 2.97 lakh crore in January 2017 to Rs 4.39 lakh crore in January 2018. The rate of growth in assets for B15 locations was 47.7% during the same period. Another noteworthy trend is that 61% of the assets from B15 locations is in equity schemes.
The rising popularity of mutual funds could be attributed to a number of factors. The awareness about mutual funds has increased due to the advertising blitzkrieg by AMFI and the investor awareness programmes conducted by fund houses as well as distributors. This coupled with the booming market has encouraged many new players to take up mutual fund advisory.
How the numbers stack up
From 82,881 in December 2016, the total distribution force has gone up to 100,257 in December 2017. Distributors in the ‘individual’ category have contributed the most to this growth. The individual ARN licenses have gone up from 68,020 to 82,476 during the same period. Licenses in other categories like ‘senior citizen’ and ‘corporate’ have collectively increased by 2,953.
Growth in ARNs
While the trend is encouraging, the mutual fund industry needs many more feet on the street distributors to cater to our large population which remains untapped.
