Penetration of mutual fund in India
The history of mutual funds in India is long, however, the growth in the size of assets is not commensurate to the period of existence of the mutual fund in India. In the last few years, however, it is changing fast and assets have witnessed a healthy growth in the last five year. It also witnessed deeper penetration during the same time on the back of a growing capital market and the industry body stepping up its effort to spread awareness about mutual fund and also the advancement of technology that made the transaction easier and transparent. Mutual fund AUM as a percentage of GDP rose from 5.6 per cent as of FY2000 to 12.8 per cent at the end of FY2018.
Despite the doubling of the AUM as a percentage of GDP, India’s standing is far lower compared to other developed economies as well as emerging economies. While the world’s average is 62 per cent at the end of last fiscal, in India it is mere 11 per cent. Hence there is a tremendous growth opportunity for mutual funds in India.