MF Industry

MF Industry 07.08.2019
 Essay on MF Sector

American indian mutual

account industry

Distribution continuum:

Most important factor

kpmg. com/in


Even though India's cost savings rate have been between 30-35 per

dollar since previous few years, investment in mutual funds have

been minimal as compared with other avenues for investment1.

Emphatically speaking, mutual fund business uses a

business to business design (B2B) rather than business to

consumer (B2C) model and so, distribution is known as a critical

accomplishment factor for any mutual account. Despite the efforts, the mutual fund items continues to continue to be a ‘push' product rather than ‘pull' item.

Indian common fund sector has evolved over time.

Though, it has grown for a Exponentially boosted Annual Expansion

Rate (CAGR) of 15 per cent via FY07 to FY13, the growth

performance in the recent years have been rather subdued.

However , Assets Under Supervision (AUM) being a per cent

of GDP to get India is approximately 5 to 6 %, significantly below some other appearing economies, for example , 40 every

cent to get Brazil and around thirty-three per cent intended for South Africa2. This indicates significant headroom pertaining to growth. Nevertheless , the

sector growth will continue to be characterised simply by external factors such as volatility and performance from the capital

markets, and macro-economic drivers such as GDP expansion,

inflation and interest rates.

Sector recorded a great AUM of INR 8, 800 billion dollars. The highest

AUM was recorded that kicks off in august 2013 since INR 9, 580 billion.

Though generally speaking, the mutual fund sector witnessed a

decline in AUM in December 2013, the AUM of fairness funds

improved by 5. 5 every cent3 because of rising share prices. One could see a change with the changing demographic profile

of the Indian population, with new products being launched

(for example, products being associated with pensions), together

with economical awareness and literacy endeavours for traders both by the industry as well as the regulator, current onus

of expanding the industry falling around the distributors—the

first point of contact for investors. Marketers would have to encourage and guide the investors about using shared

funds like a tool pertaining to financial desired goals rather than as just simple investments. Technology could definitely behave as an enabler in reaching out to investors in far and distant places.

From this report, we now have tried to state the fundamental

challenges facing the sector, how restrictions could help

in the growth of the sector as well as the role distribution could

play as the key change catalyst in the future. The report likewise outlines the upcoming styles in the sector.

We hope you like reading the report as much as we have

loved preparing this!

We pleasant any remarks and insights on it.

Shashwat Sharma

Shrivardhan Goenka




Indian Chamber of Business (ICC)

KPMG in India

1 .


2 .

The Association of Mutual Funds in India (AMFI), Foreign Monetary Account

3. 0000& nvtype=TIDINGS (January 2014)

Indian common fund sector: Distribution

continuum - Key to success

Table of contents

Current Industry Examination


Foreseeable future Potential in the Indian MF Industry


Key Upcoming Trends inside the Indian Mutual Fund Sector


Way Forward


About ICC


About KPMG in India





Current Industry


The Of india mutual finance industry indicates relatively

slow growth inside the period FY 10-13 growing at a CAGR

of approximately 3. a couple of per cent. Common (AUM) was at ~

INR eight, 140 billion as of Sept. 2010 2013. However , AUM

increased to ~ INR 8, 800 billion as of January 20131.

Fig. 1: Development in the AUM

In comparison to global markets, India's AUM transmission as a per cent of GROSS DOMESTIC PRODUCT is between 5-6 per cent while it is approximately 77 % for the U. T., 40 per cent for Brazil and 31 per cent for South Africa2.

Despite the relatively low...

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