Acknowledging the role of distributors in the growth of mutual funds in India, SV Muralidhar Rao, Executive Director, SEBI said that distributors are playing an important role in increasing the penetration of mutual funds in the country. He was speaking at the CII Mutual Fund Summit held recently in Mumbai.
Rao said that the industry has ample scope of mobilizing assets through distributors. It is recognised fact that growth in B30 penetration is due to distributors, he said. He further said that geographical diversification of mutual funds is one of the key objectives of SEBI.
Rao has also asked AMFI and fund houses to promote direct plans among investors. He said that direct plans are more cost effective, transparent and less prone to mis-selling. Sharing some interesting data, Rao said that the direct equity AUM accounts for 22% of the total equity AUM.
He further said that the industry needs to promote passive funds such as ETFs. Currently, ETFs account for 4% of the total industry AUM. In US, ETFs account for 15% of mutual fund industry assets, he said.
