5 interesting investor portfolio trends revealed; 53% of 2.3 crore new portfolios from small towns over 5 months, SIPs popular, says Zerodha Fund House

Trending News: New portfolio registrations at Zerodha Fund House, a joint venture between Zerodha and smallcase, amounted to 2.3 crore in five months from April through August, with small towns and cities accounting for 53 per cent of those portfolios, according to data released by the asset management company. Zerodha Fund House, focused exclusively on building passive investment products, develops and provides index funds and exchange-traded funds (ETFs). 

Here are five key trends highlighted in the Zerodha Fund House report: 

Investors in small towns contribute 19% to Zerodha Fund House's overall AUM

Portfolios from investors located in small towns and cities account for 19 per cent of the fund house's overall assets under management (AUM)—a popular metric that determines the size of a fund house.

In other words, although more than half of the portfolio registrations at Zerodha Fund House came from small towns and cities in the five-month period, such investors accounted for less than one-fifth of its overall assets under management.    

SIPs are the preferred route of investment for most such investors

Maximum portfolios located in small towns and cities prefer the systematic investment plan (SIP) mode for investing in the desired schemes.   

Can you guess their favourite mutual fund category?

Another key finding of the Zerodha Fund House data is that 79 per cent of such portfolios go for the equity growth option to invest in funds.

The 'growth' option enables investors to part their funds with the aim of capital appreciation. In this option, dividends are not distributed to the investors but instead reinvested in the same to ensure maximum growth. 

50% of investors prefer the direct mode

More than half of investors from small towns and cities prefer direct plans to regular plans, according to the report. 

While a direct mutual fund option enables the investor to park their funds directly with the fund house, investments under a regular plan are routed through distributors or agents.

This also means that a direct plan has a relatively lower expense ratio than a regular plan.  

Take a look at the average ticket size

The average ticket size of portfolios from small towns and cities stands at Rs 1.13 lakh, according to Zerodha Fund House.

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