The Indian mutual fund industry's assets under management race from Rs 3 trillion to Rs 4 trillion has come in just nine months.
The fastest-ever AUM growth shows the dominant role of private and foreign players in the domestic market, after the government opened the MF doors to the private sector in 1993.
The inflows to fixed income schemes contributed nearly 70-75 per cent of this growth, reflecting the rising retail interest in participating in the secondary market through mutual funds.
The total AUM of the mutual fund houses in the country crossed the Rs 1 trillion size in June 2003, a decade after the private sector entered the mutual fund business.
The industry touched the Rs 2 trillion mark after two years and three months in September 2005. However, the growth rate of the industry scaled in the following year, as the next milestone of Rs 3 trillion was reached after 11 months in August 2006.
"The domestic mutual fund industry has grown 50 per cent over the last year. We are witnessing a rise in retail participation, which is coming through the systematic investment plans. But, there is still a long way to go as only five per cent of the households are investing in mutual funds," A P Kurian, chairman, Association of Mutual Funds, said.
Kurian, who has been associated with the domestic MF industry since its inception, says that reaching out to untapped investors in rural India, where incomes are on the rise, would be key for the growth of the funds.
Ajay Bagga, head of Lotus Mutual Fund, observes, "The MFs could witness 5-6 times growth in the next 7-8 years, as the industry has become a globally significant
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