WHY MUTUAL FUNDS NEED AMBITION TO EXPAND

HERE is a tendency in the mutual fund industry to measure performance based on assets under management.

- RAJAS KELKAR

The AUM of the industry has grown to ₹80 lakh crore in no time, gloat most mutual fund executives. It is not a small achievement. A year ago, it was just ₹63 lakh crore, according to the industry data. It was merely ₹30 lakh crore five years ago.

However, AUM growth does not give the whole picture. The number of unique investors in the mutual fund industry is less than six crore. It has grown by 10-11% year over year. However, it is still below potential for a fast-growing economy like India, where the population is nearing 150 crore. That means barely 4% of the country’s population is touched by the mutual fund industry. To add to that, 80% of investors are concentrated in the top 30 cities. In fact, Maharashtra alone accounts for 30-40% of the investors.