According to a recent Cafemutual EY report called ‘Mutual Funds in India Being Future Ready’ an analysis of RBI and AMFI data shows that the AUM of mutual fund industry is likely to reach Rs.20 lakh crore in the next three years. This translates to a growth of 19% i.e. from Rs. 12 lakh crore in 2015 to Rs.20 lakh crore in 2018.
Factors like increasing awareness among investors about mutual funds, government’s initiative on financial inclusion and growing population of young investors will help MF industry achieve this growth.
“The Indian mutual fund industry is in a sweet spot with all the enabling ingredients in place. While a sound macroeconomic environment and favourable demographics ensure availability of long-term capital inflow, a proactive and conductive regulatory regime facilitates the industry’s growth,” said the report.
Surprisingly, the report has found that Indian mutual fund industry has outpaced global mutual funds in terms of AUM growth. AUM of the Indian MF industry has grown at a CAGR of 17% compared to global average of only 9% since 2008.
“Global mutual fund assets have increased at a CAGR of 9% during 2008-14 to US $31 trillion after decreasing significantly in 2007-08. The Asia-Pacific and Americas regions recorded 10.3% and 9.2% CAGR growth in AUM, respectively. Strong fundamentals of the Indian economy helped cushion the Indian financial markets against the global financial crisis,” said the report.
Further, the report said that B15 centers will be the key growth driver for the mutual fund industry. Fuelled by robust farm growth, rising rural wages and increased government spending, the B15 centers has shown commendable growth and likely to maintain this pace, added the report.
