 "Assets under management to double to Rs 35 lakh cr in 5 years: MF industry")
With growing retail participation, low interest rates, digitisation and introduction of new products, the mutual fund (MF) industry is expecting to double its assets under management (AUM) to Rs 35 lakh crore over the next five years, industry players said on Saturday.
As of January 31, 2017, the industry's AUM stood at Rs 17.37 lakh crore and industry members estimate the same could reach close to Rs 20 lakh crore by March.
Securities and Exchange Board of India (Sebi) Chief General Manager Piyoosh Gupta urged MF companies to expand their reach in the eastern region as the contribution of eastern states was only at around 7.4 per cent of the AUM.
"A surprisingly sharp rise in systematic investment plans promoted more sustainable growth from the industry as more people moved away from the concept of large lump sum investments," said a PwC report released at an event organised by the Indian Chamber of Commerce.
The report said that the growth trend in 2016 was due to the increasing number of investor accounts, steadily growing monthly investments into equity schemes from retail customers, greater participation from smaller cities and surge in inflows into exchange traded funds.
Himangshu Vyapak, Deputy Chief Executive Officer of Reliance Nippon Life Asset Management Limited, said that digitisation would be a key driver for on-boarding of retail customers.
Association of Mutual Funds of India data show that there are 1.27 crore SIP accounts across the MF industry and the total amount collected last month was at Rs 4,095 crore.
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"In the immediate future, with interest rates declining, it is reasonable to predict that debt funds will be drivers of growth in the first half of 2017, while the effect of goods and service tax could be felt in the second half," the report said.
The report also said that Sebi is promoting the alternative investment fund platform, which will allow scope of product innovation around real estate and structured credit and eventually other forms of products such as infrastructure investment trusts.