How does India invest or what does the above have to do with the story of mutual funds or why are we trying to parallelize the way India saves? If we look at the mutual fund industry today, it has an asset under management (AUM) of around Rs 38 lakh crore. Biggest AMC is not a private sector giant but an old Indian rusty but trustworthy name in the mutual fund industry. What is he doing that other smart players are not doing? The answer lies in the above saying. Branch network plays an important role in reaching out to the masses for investment. Where there is a branch whether it is a Category B City, Gram Panchayat, Tehsil, Gram Panchayat, the branch is playing its role in promoting the “Mutual Fund Sahi Hai Concept”.
I have spent 2 decades of my banking life working in B30 towns. I have seen struggles to explain the concept of mutual funds. Last summer I was invited by a client to his farmhouse in a small village called Sunderpur in Saharanpur district. He also introduced me to his gardener with great enthusiasm. In return, he introduced me to his son, who was the first graduate of the family. The son was also an insurance agent and a NISM certified mutual fund seller holding his breath. My eyes lit up when I visited places like Bhiwadi or Moradabad where I got an open hand from all to introduce myself as a financial planner or a mutual fund distributor. This is all very fresh from the early days of the industry around 15-20 years ago. When I experience all this the above number of 38 lakh crores seems very small and in the next 10 years another zero is added to it, I say it is inevitable. All developed economies have an equal share of their wealth. In fact, in the case of the US, it is biased towards mutual funds. India will slowly but surely reach there. We have seen over the last 25 years that Equity Mutual Funds have given reasonable returns on the basis of CAGR and in the long run this is the best asset class that the Indian middle class can expect.
As I look at the decade, the Indian economy could transform itself into the third largest economy in the world; And India’s mutual fund industry could be one of the major beneficiaries.
I end the article with bold letters
“MUTUAL FUND SACH MAIN SAHI HAI”.
Views are personal: The author is Jaideep Pratap, COO of WealthApp Distributors Pvt Ltd, Kolkata.
Disclaimer: The views expressed are those of the author and are personal. TAML may or may not subscribe to it. The views expressed in this article/video are in no way intended to predict or time the markets. The views expressed are for informational purposes only and do not imply any investment, legal or taxation advice. Any action taken by you based on the information contained herein is your responsibility alone and Tata Asset Management will not be liable in any way for the consequences of such action by you.
Mutual fund investments are subject to market risks, read all the scheme related documents carefully.