As of October 2023, data from the Association of Mutual Funds in India (AMFI) reveals that Gujarat boasts an AUM of around Rs 1.95 lakh crore under equity mutual funds. In the same month, Gujarat surpassed Karnataka and New Delhi to secure the second position in equity AUMs.
Jayesh Vithalani, a financial consultant based in Ahmedabad, attributes this trend to the significant rise in rural participation in mutual fund investments. “This rise is particularly notable among young professionals migrating from smaller villages and towns to urban areas. These individuals increasingly favour opening demat accounts and adopting investing as a savings habit. Aggressive campaigns by AMFI, coupled with improved awareness from mutual fund distributors, companies, and institutions, have contributed to this positive trend,” he says.
Rural participation is not the sole factor driving Gujarat’s high equity AUM. The state has also benefited from the launch of several new fund offers by asset management companies. Furthermore, 59% of Gujarat’s total AUM of Rs 3.3 lakh crore comes from equity mutual funds, showcasing the apparent interest of investors in the region. Young, tech-savvy professionals are also leveraging technology platforms for their financial investments.
“Often, a young professional encourages one’s family members to open demat accounts and initiate their investments and savings. The lure of better returns and consistent market performance has led to an overall high inclination towards mutual fund investments in the state,” said a mutual fund distributor from Ahmedabad.
Smartphone penetration is another encouraging factor driving investments, with easy-to-operate mobile applications facilitating investment. Additionally, after a favourable earnings season in October, several companies directed their gains towards debt and equity funds.