“India is already witnessing a gradual shift in household savings as dominance of physical savings (real estate and gold) is going down, while share of financial savings is growing.”
Key points:
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India witnesses significant mutual fund investments growth
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Substantial rise in number of investors into mutual funding
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How is this rise sustained
In the past few years, India has seen an exponential growth in mutual fund industry.This growth is credited to changes in demographic growth, economic development and investment behaviour.
Mutual fund industry in india is seeing a significant growth over the years. The openness , transparency towards financial dealings to using algorithms to manage funds,and the competitive spirit has made it come a long way.
In 2022 and for coming years, its estimated that number of investors in mutual funds will raise to 1.8 crores with growty rate of 40% .
This change in Indian mutual funds industry is due to two factors:
- More accessibility to people across the social classes to invest than ever before
- Early awareness and early begin to invest for a better future returns.
Intially,the mutual funds were offered by financial institutions like HDFC,ICICI prudential etc., Where as currently there are various schemes available with wide range of offers availed. This has led to many investors to come forward to invest their money.
In an article, HDFC managing director quoted “When it comes to the share of MFs in the market capitalisation, it is less than 5 per cent in India, which only proves the huge market potential. “India has a very saving culture as Indians save Rs 20-30 lakh crore every year, which indicates immense scope for channelizing this saving into MF industry.
Though the demonetization and pandemic showed a decline in investment sector, we are already witnessing a gradual shift in household savings as dominance of physical savings (real estate and gold) is going down, while share of financial savings is growing, with new initiatives, openness and transparency provided regarding investment plans.
Mutual funds is important part of financial services of India.
We are already witnessing a gradual shift in household savings as dominance of physical savings (real estate and gold) is going down, while share of financial savings is growing, making it to potentially grow and prosper.
(With Inputs from The Hindu business line)