Why Retail masses, have stayed away from Mutual Funds? We at Mutualfundwala expect a high double digit incremental growth of Mutual Funds in India for at least another 15-20 years. Whereas this is over 55% in countries like the US. Similarly, household penetration of Mutual Funds in India is abysmally low at 5%. In Developed countries, this ratio is very high. Assets under management (AUM) as a %age of GDP at 7%, is extremely low in India. Currently 41 AMC’s manage over 20 lac crore of investors wealth. The Mutual fund industry has an immense potential for growth. Several risk mitigation tools like STP, SIP, SWP, Balanced Funds etc are at the disposal of investors.Īvailability of relevant information and negligible paperwork makes investors at ease. Under sec 80CC of IT, Act ELSS (certain tax saving Mutual Funds) enable investors to save tax. Investor protection and education of retail investors are overseen by Securities and Exchange Board of India (SEBI) 500 every month in mutual funds can generate wealth amazing wealth. SEBI guidelines and regulations provide transparency and liquidity. To provide alternate route of investments to retail, HNI’s and corporates.Assists large scale corporates to deploy large sums of money for a very short period of time, from a few days to few weeks.Investing in various Debt and equity paper of Government and quasi-government (PSU) body corporates and Banks.To assist in capital Formation in the economy.To provide safe and decent real returns to the investing community.Today we have 41 Asset management companies and combined assets under management of over 20 lac Crore. SEBI (Securities and Exchange Board of India) was established in the year 1992 and came out with the first set of regulations (for Mutual Funds) in the year 1996. It was in the year 1994-95 that private sector Mutual Funds, with the same tax benefits, were allowed. Today, Mutual Funds have come a long way. Mutual Funds was first Introduced in the year 1963, in the form of UTI, by an act of parliament called the UTI Act. The entity employing the Fund manager is called the Asset Management Company (AMC) or the Fund house. A fund manager may manage several schemes at a time. A fund manager is assisted by a team of experienced & well-qualified research analysts. A Fund manager is professionally qualified who strives to generate the best possible “risk adjusted return “. The Mutual fund is managed by a fund manager. A Mutual Fund essentially collects money from retail & institutional investors to invest in a combination of debt and/or equity paper. Anyone and everyone interested in Personal Finance needs to know about Mutual Funds. Investing in mutual funds is a smart and organized approach to managing money.
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