Banking On MFs For Wealth Creation
Business Today India|September 15, 2024
Retail investors, on a journey of wealth creation, have taken to investing in mutual funds of all hues—equity, debt, and hybrid
RADHIKA GUPTA
Banking On MFs For Wealth Creation

MUTUAL FUNDS, OR MFs, have become ubiquitous vehicles of choice for investors across the economic spectrum looking to achieve their financial goals. In the past decade, and more so in the post-Covid period, retail investors have taken to MFs of all hues—equity, debt, and hybrid—in their journey towards wealth creation. As we analyse the phenomenal growth of the ₹61.16lakh crore industry in recent years, many interesting trends and facets emerge. They also indicate where the industry is headed in the coming decades.

Mutual funds are now steadily catching up with the fixed deposits of banks in terms of assets garnered. An expanding systematic investment plan (SIP) book that is effectively helping domestic institutional investors (DIIs) in cushioning against foreign institutional investor (FII) selling, rapid growth in assets from smaller cities, and a rising share of assets under management (AUM) outside the Top 10 players are key trends.

The one key aspect that the industry may have to work on is to improve upon the relatively short holding period of retail investors in equity funds. Here are key factors propelling the MF industry and the opportunities that lie ahead:

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