Tomorrow, and tomorrow, and tomorrow...

There are a total of about 1.1 lakh crores of rupees invested in India’s mutual funds and the number of investors is now about 12 crore

Are those numbers wrong? Are they many, many times larger than what they should be?

Are we lying? The answer to all those questions is no. That number is roughly correct. This is the truth — the only thing is that the truth that has been told, shall we say, a little early.

This is where India’s mutual funds will be around the year 2040. If you think the numbers are too high, then just look back to say, 2005. That was a time when the current era in India’s economic or investing history had not yet begun and even the great bull run of those years was in a nascent stage. The total AUM of India’s mutual funds at the end of 2005 was ₹1.82 lakh crore. At that time, anyone who had said that in 2023, this number would be 23 times higher would have been accused of being absurdly optimistic. And yet, here we are.

The intervening years have seen all kinds of times in the economy and in the markets, from the very bad to the quite good. There was even a three-year period when the total AUM of mutual funds actually declined. Despite all that, these have been sterling years, averaging a 20 percent growth rate.

Who did this?

There are four members of the team who have combined to achieve this:

● The Indian economy, because of which a lot of people have more money to invest

● The performance of Indian mutual funds which has always been of the kind that has left practically every long-term  investor happy and pleased. 

● The regulatory framework, which has ensured that investors mostly get a fair deal and do not have to worry about the basic safety and security of their investments.

● The entire marketing and sales effort around funds because of which the reach and convenience of mutual funds has expanded dramatically.