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Mutual Fund Market: The growth of the country’s mutual fund market is happening so fast that its AUM can increase to Rs 300 lakh crore in the coming 10 years. Maximum investment will come in the equity sector.
New Delhi. In view of the increasing number of people investing in the stock market and mutual funds, it is estimated that in the next 10 years the total investment in mutual funds will increase to more than Rs 300 lakh crore. Recent reports by consulting firm Bain & Company and investment platform Grow have shown that maximum investment is likely to come in the equity sector. Due to digital access, the reach of investment schemes is increasing rapidly.
According to Bain & Company and investment platform Groww, assets under management (AUM) under mutual fund schemes are expected to exceed Rs 300 lakh crore by 2035, while direct equity shareholding is expected to reach Rs 250 lakh crore in the same period. The report said that the high growth in AUM is driven by increasing participation of retail investors and wider digital reach. According to the report titled ‘How India Invests’, the penetration of mutual funds among Indian households is expected to increase from 10 per cent to 260 per cent in the next decade.
Why is the sector growing rapidly
According to the report, the next wave of growth in the mutual fund industry will be driven by ‘increased domestic acceptance, strong digital enablement, supportive regulation and growing investor confidence’. On the other hand, the expected increase in equity stake can be attributed to the shift from speculative trading to long-term investments. Also, digitally driven penetration and strong market performance also have a role in this. Due to easy access to investors, its scope is increasing rapidly.
Changing way of saving
Saurabh Trehan, partner and head of financial services, Bain India, said Indian households are gradually moving from a traditional savings mindset to a more investment-oriented approach. Also, mutual funds and direct shares have emerged as the fastest growing asset classes in recent years. Harsh Jain, co-founder and chief operating officer (COO) of investment platform Grow also agreed, saying that we are seeing a structural change among Indians. Now they are moving towards the mentality of ‘investment first’ instead of ‘saving first’.
Sector will grow with the economy
The report highlights retail investment as a major contributor to India’s journey to becoming a $10 trillion economy. According to this, such investment will create more than seven lakh new jobs in the financial environment and businesses and provide easy access to growth capital. Obviously this will directly benefit the Indian economy. As the market grows, investment in mutual funds will also increase.
