According
to AP Kurian, Chairman of AMFI, there are 180 million households
in India, of which only 11.8 million, i.e., 6.7%, invest
in mutual funds. In urban areas, 13.7% of the households
invest in mutual funds and in rural areas it is just about
3.8%. Thus, it is that Indian small investors do not prefer
mutual funds. This article lists the various reasons for
the low investment in mutual funds. It also provides the
various benefits to the small investors.
The
Indian MF industry has grown in terms of Assets under Management
(AUM), number of Asset Management Companies (AMCs), types
of investors, number and variety of schemes and the number
of distributors participating in the industry. As on February
2008, the industry comprised 32 AMCs, 1644 schemes and crossed
36 million folios. The majority of the funds in India, approximately
96% are open-ended type and the remaining 4% are close-ended
type. The MF industry is growing at an average rate of 16-17%
because of the entry of commercial banks and the private
players coupled with the rapid growth of the Indian capital
market. Even then India ranks 25 in the AUM of the global
MF industry.
The
Indian MF industry is mostly concentrated among High Net
Worth Individuals (HNWIs). Irrespective of the many players,
the MFs today have neither gathered a large investor base
nor garnered huge AUMs. The urban investors are playing
a major role in the industry and it should be diversified
into rural and suburban areas, where there is a vast potential
market. |
