AUM-to-GDP ratio only 7 per cent: PwC report

Though asset base of fund houses crossed the Rs 10-trillion-mark last month, the industry has to tread a long way to catch up with the world when it comes to AUM-to-GDP ratio, which is a paltry 7-8 per cent against the global average of 37 per cent, says a PwC report.
"The mutual fund penetration in the country is very low compared to global and peer benchmarks. The AUM-to-GDP ratio currently stands at 7-8 per cent compared to a global average of 37 per cent," according to a PwC-CII report.
The report also noted that the fund houses badly need to tap the large untapped market as a whopping 74 per cent of the current AUM come from the top five cities, 13 per cent from the next top 10 cities and 6 per cent from the next top 20 cities with the next 75 cities contributing a paltry 3 per cent. There was no change in this break-up since 2009.

However, when it comes AUM break-up by investor class, the share of the corporates rose by 2 percentage points to 51 in 2014, which was 49 in 2009, followed by FIIs with 21 per cent during the same period, which stood unchanged.
Banks/FIs share was 2 per cent in 2014, down from 5 per cent in 2009; HNIs at 27 per cent, up from 21 per cent in 2009 and retail remaining unchanged at 21 per cent since 2009.
The domestic AUM has grown from Rs 4.7 trillion in March 1993 to Rs 8.25 trillion in March 2014 and over Rs 10 trillion by May 2014, reflecting a CAGR of over 15 per cent over the past 21 years. In the same period the Sensex grew from 2280.52 points as of March 31, 1993 to 22,386.27 points as of March 31, 2014, clipping at a CAGR of 11.5 per cent, according to the report.

According to PwC, the global aggregate AUMs stood at USD 64 trillion in 2012, led by the US with USD 27 trillion and this global AUMs is expected to exceed USS 100 trillion by 2020.