This story belongs to the Fortune India Magazine May 2023 issue.
ADVERTISEMENT
IN A NATION OF SUPERSAVERS, deposits continue to be the most favoured investment with 52% of overall household savings (as of March 2022) still locked up in banks. Life insurance comes second at 24%. But what's glaring is that the share of mutual funds, as per a report by Edelweiss-Crisil, is abysmally low at 9.8% even as investment in currency is still higher at 14%! Though assets under management (AUM) are at a record high of ₹40 lakh crore (as of December 2022) compared with ₹21 lakh crore in December 2017, it seems individuals have not embraced MFs completely — which poses both a challenge and an opportunity for the industry. While individuals dominate the share of the AUM at 59% — with SIP AUM rising to ₹7 lakh crore — dismal returns mean fund houses will have to put their might — both distribution and marketing — to swing savings their way. But the removal of long-term tax benefits on debt funds just made things worse for the industry.
Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.