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Mutual Fund Industry and its Prospects in Indian Scenario

Ragini Shah, Yashba Humra


Institutions and banks have been an integral part of capital market operations. Small investors, who possess limited income, find it difficult to pool their saving in the capital market. To cater the needs of small investors under the guidance of professional team of experts mutual fund came into existence. Moreover, Indias savings rate has been between 30-35 percent since last few years but investment in mutual funds have been minimal as compared to other avenues of investment. However, mutual fund business follows a Business to Business model (B2B) rather than a Business to Consumer (B2C) model and hence, distribution is a critical success factor for any mutual fund. Thus, an effort is being made by the professionals to make mutual fund as a pull model rather than a push model. The paper aims to center towards the inception and growth of mutual fund in India. Indian mutual fund industry has witnessed considerable growth since its inception in 1963. Assets Under Management (AUM) have surged to Rs 8,684 bn in June 13 from just Rs 250 mn in Mar 65. In a span of 48 years, the industry has registered a CAGR of 24%. The impressive growth in Indian Mutual fund industry in recent years can largely be attributed to various factors such as rising household savings, comprehensive regulatory framework, favorable tax policies, and introduction of several new products, investor education campaign and role of distributors. Thus, in this paper an effort is being made to capture the key prospects of mutual fund along with challenges faced by under penetrated Indian market.


Mutual fund, AUM, CAGR, UTI

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