1.1 Market Scenario
As a culture, India has a precarious relationship with money. Deeply ingrained societal values dictate that we work hard to earn money and save consciously to secure a better future for our family.
Investment instruments like physical gold and community based chit funds that encompass a majority of population till date are being considered secondary at least in metropolitan cities.
Mutual funds account for a total of Rs. 23.21 trillion worth of Assets Under Management (AUM); a whopping three-fold increase from the March 2013 figure of Rs. 7.01 trillion.
Its place has been taken by stock trading platforms that allow people to partake in the wealth creation in the capital markets. We here take a close look at the Mutual Funds (MFs) market.
The Indian Mutual Fund Industry has grown by leaps and bounds to become the fastest growing segment of our financial sector.
The value of assets held by individual investors showcase an absolute increase of 35.8% wherein the Institutional assets increased at an absolute growth of 8.90%.
Data shows that in the first eight months of 2015-16, some 35 lakh new investors put their money in mutual funds through the SIP route, signaling a major shift in the investment mindset of the nation.
Systematic investment plans (SIPs) have now become synonymous with MFs. For most salaried professional who take home a monthly salary, a monthly SIP that automates the investment process fits well with their cash flows.
The disciplined design of an SIP allows for the allocation of regular investments in a majority of equity-backed mutual funds, which helps investors make the most of the volatile nature of capital markets.
Industry data shows that the mutual fund sector added 19 lakh Systematic Investment Plan (SIP) accounts in the first nine months of 2015-16.