Karnataka has emerged as the fourth largest contributor to the mutual fund industry as of March 2021. As per data with the Association of Mutual Funds in India (AMFI), Karnataka accounted for 6.5% of the industry’s total assets, behind Maharashtra, Delhi, and Gujarat.
The mutual fund industry witnessed an increase of 37.81% in its total assets under management to Rs 32.43 lakh crore till April 2021 compared to Rs 23.53 lakh crore in April 2020.
In terms of the top cities, Bengaluru is at number three, after Mumbai and Delhi. Kolkata is at the fifth position and Chennai at the seventh, the AMFI data shows.
“In the equity-oriented category, Karnataka stood 4th at Rs 1,04,804 crore and also in the Debt category at Rs 68,179 crore. In the Liquid and Money Market segments and also in the Exchange Traded Funds and Fund of Funds segments, Karnataka stood 3rd at Rs 34,962 crore and Rs 4,200 crore respectively,” the AMFI told DH.
Bengaluru and 29 other cities in India account for 84% of the total average assets under management. While Karnataka has only Bengaluru in the top 30 cities, other states like UP, Tamil Nadu, and Maharashtra have more than one city named in the top 30.
AMFI stated that mutual fund investments are becoming popular in Karnataka's other cities such as Mangaluru, Mysuru, Belagavi, Hubballi, Udupi, and Manipal.
AMFI further adds that the IT crowd in Bengaluru drives these inflows. “Bengaluru is a metro city and is the hub for a large IT and ITES industry. Corporates from this sector and even their employees invest in mutual funds,” says AMFI. “The other industries in the services sector are also quite active and employ a lot of talent pool from Bengaluru.”
“Between them, the disposable income levels are quite high and some portion of that gets invested in the MF industry, as the data shows. Moreover, a large segment of well-off retired fraternity resides in Bengaluru contribute significantly,” AMFI said.
Mutual funds have been an asset class for a lot of investors and even during the pandemic, there has been a steady increase in assets under management, except in the month of September, as per the Motilal Oswal Monthly Mutual Fund Tracker.
Contribution towards Systematic Investment Plans (SIPs) has been steady with flows to the tune of Rs 8,000 crore coming in through this route.