(MENAFN- IANS) New Delhi, Aug 10 (IANS) Investments in mutual funds have picked up strongly in the post-Covid period, with smaller towns and cities emerging as surprising growth leaders as assets from B30 cities -- those beyond the top 30 -- have been growing faster than those from large urban centres, as per the data from the Association of Mutual Funds in India (AMFI).

As of June 2025, B30 locations accounted for 18.5 per cent of the total mutual fund assets under management (AUM), translating to nearly Rs 14 lakh crore out of the industry's Rs 75-lakh crore AUM.

Over the past five years, assets from these smaller cities have grown at a compounded annual growth rate (CAGR) of 28 per cent, compared to 23 per cent in T30 cities.

The overall industry AUM rose at 24 per cent annually during the same period, the report showed.

The trend is also changing the geographical investment map of the country. States such as Uttar Pradesh, Rajasthan, and Madhya Pradesh -- traditionally seen as less prosperous -- have overtaken larger, more developed states in mutual fund asset rankings.

Uttar Pradesh now has more AUM than Tamil Nadu, Rajasthan has edged past Telangana, and Madhya Pradesh is ahead of Kerala.

Industry experts believe that rising financial literacy, improved digital access, and the success of systematic investment plans (SIPs) have helped smaller cities catch up rapidly.

The shift indicates that India's investment culture is no longer limited to metros but is spreading deep into Tier-2 and Tier-3 regions.

This pattern mirrors other economic trends, where smaller cities are driving growth in sectors like e-commerce, fintech, and retail.

Analysts say the mutual fund industry's expansion into new geographies could help deepen capital markets and bring more retail participation in the years ahead.

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