MF AUM has potential to reach 50% of GDP in 20 years, says Amfi CEO

Chalasani believes the industry body has played a pivotal role in popularising MFs and ensuring transparency and high governance standards at AMCs

The Association of Mutual Funds in India (Amfi), which has been instrumental in driving mutual fund (MF) awareness, completes 30 years this month. Amfi Chief Executive Venkat Nageswar Chalasani believes the industry body has played a pivotal role in popularising MFs and ensuring transparency and high governance standards at asset management companies (AMCs). In an interview with Abhishek Kumar in Mumbai, he says there is still more to do as the industry grows. Edited excerpts:

 

What are the key achievements of Amfi in these three decades?

 

MFs have come a long way in these years — from being a niche product to becoming mainstream. Amfi has been instrumental in spreading awareness. Secondly, we have strengthened systems, processes and risk controls. As a result, trust and transparency are now a hallmark of the industry. Investors can see, on a daily or monthly basis, the net asset values (NAVs), where exactly their money is invested, what risks exist, and the returns being generated. Also, we have put in place a robust code of conduct for both distributors and our members, which has helped strengthen professionalism and accountability. In addition, Amfi has played an important role in policy advocacy, serving as an effective bridge between the industry and regulators.

 

Over the years, there have been talks of Amfi evolving into a self-regulatory organisation (SRO). Is that a possibility?

 

As of now, we are a trade body. However, we do play a regulatory role with respect to distributors. We monitor their conduct, lay down rules on how products should be marketed, and take corrective measures in cases of mis-selling, including imposing penalties when required. When it comes to AMCs, our role is different. We don’t issue circulars like an SRO would. Instead, we come up with best practice guidelines, ensuring uniform standards across the industry.

 

How do you plan to continue managing the interest of all players as the industry grows?

 

The strength of Amfi lies in its robust committee structure. We have specialised committees that deliberate in detail on industry challenges, opportunities, risk controls, and areas of improvement. They also serve as a platform for engaging with the regulator, since the Securities and Exchange Board of India (Sebi) often consults the industry through Amfi. For new players, this structure is invaluable. By participating in these committees, they benefit from established practices and contribute to shaping uniform standards. It creates a win-win situation, ensuring consistency across the industry while giving every AMC, large or small, a voice in decision-making.

 

Do you see any misses or areas where there is scope for improvement? Are there plans to address those?

 

Yes, certainly. Today we have just 55 million investors, and MFs' assets under management (AUM) is only 20-22 per cent of the country's gross domestic product (GDP). Hence, a lot needs to be done to deepen penetration. The biggest challenge is financial literacy. There are initiatives in place to address the gaps.

 

We have adopted four states where awareness programmes are being run intensively, district by district. This is beyond the online and offline campaigns nationwide. Expansion of the distributor network is also a part of this plan. We recently tied up with the Department of Posts, which has over 250,000 postmen, to expand our distribution reach. There are also ongoing campaigns, specifically to onboard more distributors.

 

Where do you see the industry in the next 20 years?

 

Today, our AUM is about 22 per cent of the GDP. Over the next 20 years, we aim to reach 50 per cent. We also expect the number of investors to triple. In the near term, within the next five years, our goal is to double the investor base. Given that India has over 800 million banking customers, the potential pool of investors is huge.

 

The ‘Mutual Fund Sahi Hai’ campaign has been a highlight. What impact has it had, and what’s next?

 

Mutual Fund Sahi Hai has been a game-changer, making MFs and SIPs (Systematic Investment Plans) household terms across the country. The next step is to convert awareness into action. This requires continuously educating people not just about the benefits, but also about the risks, so they make informed choices. Alongside, we are taking a multi-pronged approach: adopting states, building distributor strength, lowering the SIP entry point, and using both digital and physical outreach to penetrate deeper into the market.