The mutual fund industry has registered a compound annual growth rate (CAGR) of 18% from 2009 – 2013, but the national population is still largely under-banked with a very low level of financial inclusion.
The business of Indian mutual funds (MFs) industry is largely confined within the Tier 1 cities, however, the industry is focused on developing the penetration ratio and increasing its presence in other cities. Currently, the top five cities of India contribute to 74% of the entire pie, with the remaining 26% distributed among other cities.
Given the current scenario of market volatility and uncertainty, these are challenging times for the mutual fund industry, where the investor perceives investments in the capital market to be risky and unsafe, and hesitates to channelize his savings into mutual fund products. It is critical that the distributor undertakes measures and initiatives to educate the investor and increase the level of awareness. Considering the critical role played by the distributor, it is of immense importance that the distributor fraternity is adequately trained and regulated so that the mutual fund product is sold for the right purpose and adequate time period. Continue reading
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