Mutual Funds have the expertise of managing products across the risk return spectrum. Correspondingly, for large and small investors, mutual funds offer an opportunity for deployment of savings based on individual risk taking capabilities and corresponding return expectations. This unique capability of mutual funds has helped individuals and large/institutional/corporate investors enhance significantly their return on savings over the last decade. The industry in India has some very high quality global and local players, very high quality of regulation and has a long track record of delivering returns in line with risk profile of products across the spectrum.
Mutual funds have offered great value to large and small investors. The industry in its modern form and shape is about 15 years old. The participation of individual investors in the industry has grown significantly in this period and today we have a situation where the total number of mutual fund folios actually exceeds the total number of demat accounts. Thus, more individuals are participating in India’s capital markets through mutual funds than directly through purchase and sale of other securities. This growing family of individual investors is a testimony to the fact that the industry has been able to manage the savings of both large and small investors in a transparent and efficient manner thereby creating value for all.
Investments made by large institutions have in fact helped the mutual fund industry bring down expense ratios for a large number of debt products where the institutions invest significantly. In fact, a study of the industry shows that for most debt products, the expense ratio is significantly below the limit provided under regulation.
Global experience shows that the skill of money management needs to be made available both to individuals as well as to large investors/institutions. In fact, if one studies the example of other countries like Brazil and China that have a large mutual fund industry, one finds a significant participation of institutional investors in mutual funds.
The mutual fund industry in Brazil is over $600 billion and that in China is over $300 billion. While the retail participation in mutual funds in India has increased, we have a long way to go as penetration is very low. However, the efforts of the industry are now resulting in this penetration gradually improving and increasing and investors from over 300 cities now actively participate in investing in Indian mutual funds. The industry has also provided service to institutional/corporate clients in this period.
These institutions/corporates are in turn owned by a large number of individual investors. Availability of skilled money management advice to these institutions has helped them enhance their own return on investments thereby in turn benefiting their millions of shareholders. The industry now has a 15-year track record of managing products across the entire risk return range and delivering high quality consistent returns over a long term timeframe. The focus of our efforts should now be to increase the reach and availability of this expertise available with Indian mutual funds to a wider range of individual and institutional investors to enhance the productivity of capital in our economy.
Mutual funds have offered great value to large and small investors. The industry in its modern form and shape is about 15 years old. The participation of individual investors in the industry has grown significantly in this period and today we have a situation where the total number of mutual fund folios actually exceeds the total number of demat accounts. Thus, more individuals are participating in India’s capital markets through mutual funds than directly through purchase and sale of other securities. This growing family of individual investors is a testimony to the fact that the industry has been able to manage the savings of both large and small investors in a transparent and efficient manner thereby creating value for all.
Investments made by large institutions have in fact helped the mutual fund industry bring down expense ratios for a large number of debt products where the institutions invest significantly. In fact, a study of the industry shows that for most debt products, the expense ratio is significantly below the limit provided under regulation.
Global experience shows that the skill of money management needs to be made available both to individuals as well as to large investors/institutions. In fact, if one studies the example of other countries like Brazil and China that have a large mutual fund industry, one finds a significant participation of institutional investors in mutual funds.
The mutual fund industry in Brazil is over $600 billion and that in China is over $300 billion. While the retail participation in mutual funds in India has increased, we have a long way to go as penetration is very low. However, the efforts of the industry are now resulting in this penetration gradually improving and increasing and investors from over 300 cities now actively participate in investing in Indian mutual funds. The industry has also provided service to institutional/corporate clients in this period.
These institutions/corporates are in turn owned by a large number of individual investors. Availability of skilled money management advice to these institutions has helped them enhance their own return on investments thereby in turn benefiting their millions of shareholders. The industry now has a 15-year track record of managing products across the entire risk return range and delivering high quality consistent returns over a long term timeframe. The focus of our efforts should now be to increase the reach and availability of this expertise available with Indian mutual funds to a wider range of individual and institutional investors to enhance the productivity of capital in our economy.
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