Mutual Fund Industry in India
In this report, we have brought together our expertise in the Indian regulatory and taxation landscape, and our experience of working on product innovation and distribution with Mutual Fund clients globally to address challenges faced by Indian Mutual Funds.
The Mutual Fund Industry recorded an AUM of INR 13,460 billion as of December 2015, a year on year growth of over 21%. The industry itself has been evolving over the years. Though, traditional primary contributor to AUM have been corporates, in 2015 retail segment emerged as the fastest growing segment in terms of contribution to AUM growth.
While a large population, which is moving towards economic wellbeing, promises for a strong customer base for financial services, it also poses a challenge to service providers in tapping resources, a large proportion of which sit beyond major cities. Mutual funds face a double challenge – firstly, increasing their share of the pie in the urban markets that have seen crowding of products and vendors, and secondly, capturing the attention of investors in sub-urban and rural markets that have been largely averse to complex financial instruments, and are often unreachable through traditional distribution channels. Mutual funds will have to leverage technology to drive innovation in products, and adopt alternate distribution channels to be successful in the Indian market.