The mutual fund industry has seen tremendous growth in terms of asset under management (AUM) over the past five years as it more than doubled to Rs 20 lakh crore over this period. The good performance of the equity markets has helped the industry grow but part of it could also be attributed to the poor performance of the other asset classes such as real estate and gold. However, the overall flows have slowed down in the wake of the crisis in debt funds and equity markets not doing so well in the recent past.
But the inflows through SIP (systematic investment plan) have continued to grow steadily to Rs 8,095 crore per month till February 2019 and remained above Rs 8,000 crore, which shows that retail investors still prefer mutual funds to invest in equities. However, industry experts believe that as the investor's overall exposure to mutual funds is still very low compared to other financial assets and a lot more needs to be done to increase the participation.
Mr. N S Venkatesh, Chief Executive, AMFI, says "Political stability is expected to drive pro-reform economic agenda, thereby help improve fundamentals of our economy, translating into robust equity and debt markets. We now look forward to the new government creating a conducive investment environment for the financial asset class and help bring the investor community, especially in smaller towns to come under the ambit of the mutual fund asset class. This would truly be a 'Sahi Hain' moment for the country."
Here are some of the other expectations of the industry from the new government to make investing in mutual funds more attractive.