Mutual fund industry's AUM to hit Rs 100 trillion by 2025: Mahindra AMC

Indian mutual fund industry's assets under management (AUM) are expected to touch Rs 100 trillion by 2025, due to lower penetration of the product among households, a top Mahindra AMC official said on Thursday.

At present, the mutual fund industry has an asset base of Rs 23.5 trillion.

"The country's mutual fund industry will touch Rs 100 trillion marks by 2025 as there is very low penetration of the product among people," Mahindra AMC Managing Director and CEO Ashutosh Bishnoi said.

India lags behind most major nations of the world in terms of AUM of mutual funds as a percentage of gross domestic product (GDP).

In India, asset base of mutual funds as a percentage of GDP is just 11 per cent, while the world average is 62 per cent.

Further, Bishnoi said that people want to make money and they have understood the fact that the only way to beat inflation is through investment in MFs.

Besides, investors are also shifting from traditional asset classes such as real estate and gold to financial asset class. In addition, the investor awareness campaign by industry body Amfi is generating a lot of interest among investors, he added.

According to Bishnoi, systematic investment plans (SIP) would continue to attract retail investors as they help them reduce market timing risk.

The AUM of the 42 mutual fund houses together has grown to Rs 23 trillion as on June 2018, from Rs 5 trillion as on March 2008, which is about a four-and-half-fold jump in a span of 10 years

Mutual funds are investment vehicles made up of a pool of funds collected from a large number of investors. The funds are invested in stocks, bonds and money market instruments, among others.