Mutual Fund Assets in Northeast India Witness 145% Growth in 4 Years

The northeastern states have witnessed a remarkable surge in their Average Net Assets Under Management (AAUM) for mutual funds, marking a staggering 145 percent growth from 2020 to March 2024.

This ascent has seen the AAUM soar to Rs 40,324 crore, up from Rs 16,446 crore in March 2020.

Such substantial growth underscores a burgeoning interest among investors from smaller towns and cities to explore mutual fund investments.

The share of the northeastern states increased to 0.73 percent of the total AAUM of the mutual fund industry, which stood at Rs 55.01 lakh crore in March 2024, up from around 0.67 percent in March 2020, when the industry’s AAUM stood at Rs 24.71 lakh crore.

Leading the pack among the northeastern states is Assam, boasting an AAUM of Rs 29,268 crore, which makes up nearly 73 percent of the region's total AAUM. The AAUM of Assam grew by nearly 159 per cent in the last five years, up from Rs 11,298 crore in March 2020.

Other states in the region, such as Meghalaya, Tripura, Nagaland, Arunachal Pradesh, Manipur, and Mizoram, have also witnessed notable growth in their AAUM figures.

Ashwini Kumar, Senior Vice President and Head Market Data at ICRA Analytics, highlighted the growing awareness of investment options and financial literacy, particularly in smaller towns and cities, as key drivers behind this growth. Additionally, investor awareness campaigns conducted by asset management companies (AMCs) in the northeastern region have played a pivotal role in spreading financial literacy.

“There has been a steady increase in awareness about the various investment options among people, primarily from smaller towns and cities. This, coupled with growing financial literacy and the surge in interest among retail investors for investing in equities through the mutual fund route, all contribute to a good growth in AAUM in towns and cities beyond the top 30. The investor awareness campaigns conducted by AMCs (asset management companies) in the northeastern region have also helped build awareness among people,” Kumar said.

Despite this impressive growth, mutual fund penetration remains relatively low in the country, signaling ample room for expansion. The burgeoning middle class and increasing financial literacy are expected to fuel further growth in mutual fund investments in the northeastern states in the foreseeable future.

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