According to a recent KPMG report called ‘Distribution disrupted: building a zillion distributors’, the AUM of mutual fund industry is set to reach Rs. 30.68 lakh crore in the next four years. This translates to an annualised growth of 19% i.e. from Rs. 12 lakh crore in March 2016 to Rs.31 lakh crore in March 2020.
“Mutual fund has gained popularity as an investment vehicle which is reflected in the growth of assets under management. The AUM of the mutual fund industry has seen a significant growth in the last few years. The growth is likely to continue over the next four to five years,” predicts the report.
Experts believe that the India’s young demographic, investors increasing propensity to save and invest and the clamp-down on black money will help MF industry achieve this growth.
Harsh Bisht, Partner, KPMG is of the view that people will move from physical assets like gold and real estate to financial assets like direct equity and mutual funds. “In fact, people have started moving to financial assets. Of 10.8% of Gross National Disposable Income (GNDI) in financial savings, nearly 5% is in mutual funds. The recent move of government on demonetization will further fuel this growth.”
Bisht further said that the middle class will propel the growth in mutual funds. These investors seek capital appreciation to achieve their long term financial goals, he added.
The report said that growth is likely to be supported by distribution channels which are estimated to grow at around the same pace. A three to five-fold increase in the number of distributors can help propel this growth, said the report.
